Patricia Furlong Elliott v.  United States of America

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 PATRICIA FURLONG ELLIOTT,
Defendant-Appellant,
v. No. 02-4755 
UNITED STATES OF AMERICA,
Plaintiff-Appellee. 
 UNITED STATES OF AMERICA,
Plaintiff-Appellant,
v. No. 02-4836 
PATRICIA FURLONG ELLIOTT,
Defendant-Appellee. 
Appeals from the United States District Court
for the Eastern District of Virginia, at Richmond.
James R. Spencer, District Judge.
(CR-01-327)
Argued: April 4, 2003
Decided: June 18, 2003
Before KING, Circuit Judge, HAMILTON, Senior Circuit Judge,
and Robert E. PAYNE, United States District Judge for the
Eastern District of Virginia, sitting by designation.
Affirmed in part, reversed in part, vacated in part, and remanded by
published opinion. Judge King wrote the opinion, in which Senior
Judge Hamilton and Judge Payne joined.

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COUNSEL
ARGUED: John Henry Herbig, PARKER, POLLARD & BROWN,
P.C., Richmond, Virginia, for Appellant. Thomas Andrew Hanusik,
Trial Attorney, Richmond, Virginia, for Appellee. ON BRIEF: Ste-
phen E. Scarce, PARKER, POLLARD & BROWN, P.C., Richmond,
Virginia, for Appellant. Paul J. McNulty, United States Attorney, Sara
E. Flannery, Assistant United States Attorney, Richmond, Virginia,
for Appellee.
OPINION
KING, Circuit Judge:
Patricia Furlong Elliott was convicted on multiple counts of mak-
ing false statements to a financial institution, in violation of 18 U.S.C.
§ 1014. On appeal, she raises several challenges to those convictions.
She also appeals her sentence, contending that the district court erred
both in calculating the fraud loss attributable to her conduct and in
denying her an adjustment for acceptance of responsibility. The Gov-
ernment cross-appeals the sentence, maintaining that the court erred
in awarding Elliott a downward departure based on family responsi-
bilities. As explained below, we affirm Elliott’s convictions, the
court’s fraud loss calculation, and the court’s denial of an adjustment
for acceptance of responsibility. We reverse the downward departure
for family responsibilities. Because the court erred in its downward
departure ruling, we vacate the sentence and remand for resentencing.
I.
On November 8, 2001, a grand jury in the Eastern District of Vir-
ginia returned a thirty-eight count indictment against Elliott. The
indictment alleged twenty-four counts of mail fraud; one count of
wire fraud; and, pursuant to 18 U.S.C. § 1014, thirteen counts of mak-
ing false statements to a financial institution.1 Elliott moved to dis-
1A violation of § 1014 occurs when a person "knowingly makes any
false statement . . . for the purpose of influencing in any way the action
of . . . any institution the accounts of which are insured by the Federal
Deposit Insurance Corporation . . . upon any application, advance, dis-
count, purchase, . . . commitment, or loan." 18 U.S.C. § 1014.
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miss the indictment, asserting that the charges were legally
insufficient. On March 12, 2002, the district court dismissed the mail
fraud charges, but it authorized the remaining fourteen counts to pro-
ceed. United States v. Elliott, Mem. Op., CR-01-327 (E.D. Va. Mar.
12, 2002) (the "Dismissal Opinion").2 Subsequently, the Government
dismissed the single count of wire fraud.3 On April 8, 2002, following
a one-day bench trial conducted on April 4, 2002, Elliott was con-
victed on twelve of the thirteen false statement counts (Counts 26-30
and 32-38); she was acquitted on the remaining false statement count
(Count 31). See United States v. Elliott, Findings of Fact and Conclu-
sions of Law, CR-01-327 (E.D. Va. Apr. 8, 2002) (the "Opinion").4
The facts underlying Elliott’s convictions, as found by the district
court in its Opinion, are reviewed below.
II.
A.
In December of 1991, Elliott and her brother, William Furlong
("William"), discussed their need to protect the estate of their father,
R. Dulany Furlong ("Mr. Furlong"), against the estate taxes that
would be owed upon his death. Elliott suggested to William that they
transfer their father’s stock into a three-party brokerage account, on
which she, William, and Mr. Furlong would each be a principal. At
that time, Elliott held a power-of-attorney for her father. William
agreed to the proposal, and the account was opened in January of
1992 at Wheat First Securities (the "Wheat First Account"). The
Wheat First Account was held by the three principals in joint tenancy
2The district court dismissed the mail fraud counts because they failed
to "adequately link Defendant’s mailings and her scheme to defraud,"
and because they were barred by the applicable statute of limitations.
Dismissal Opinion at 6, 11.
3The Government dismissed the wire fraud charge pursuant to Rule
48(a) of the Federal Rules of Criminal Procedure, which provides that,
"[t]he government may, with leave of court, dismiss an indictment." Fed.
R. Crim. P. 48(a).
4On April 15, 2002 and June 19, 2002, the district court amended the
Opinion to make technical corrections. When referring to the Opinion,
we refer to it as amended.
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with the right of survivorship.5 Pursuant to the account agreement,
Wheat First authorized any one of the three principals to disburse
funds from the account. Upon the direction of a principal, Wheat First
would issue a check in the names of all three principals. However, the
check would be negotiable only if it carried the endorsement of each
of the three principals.
In addition to the Wheat First Account, Elliott also maintained at
least two bank accounts at Southside Bank ("Southside"), an institu-
tion in Aylett, Virginia, insured by the Federal Deposit Insurance Cor-
poration (the "FDIC"). One of the Southside accounts was held jointly
by Elliott and Mr. Furlong (the "Elliott/Furlong Account"), and the
other was held jointly by Elliott and her husband. In the nearly four-
year period between the opening of the Wheat First Account in Janu-
ary of 1992 and Mr. Furlong’s death in December of 1995, Elliott
directed Wheat First to issue several checks on the Wheat First
Account, which she thereafter deposited into the Elliott/Furlong
Account at Southside. The Wheat First checks were all issued in the
names of Elliott, William, and Mr. Furlong and, when deposited at
Southside, bore the purported endorsement of all three principals.
William, however, had neither endorsed the checks nor authorized
that they be endorsed on his behalf.
Southside customarily "advanced" funds to its customers in good
standing, extending "immediate credit for deposits from [other] banks
to [eligible] customers . . ., pending payment of the check by the
[other] bank."6 Opinion at 3. Because Elliott was a customer in good
standing, she received credit on twelve of the Wheat First checks
bearing William’s forged endorsement (the "Forged Checks")7 imme-
5Upon the death of any principal, all property held in joint tenancy
with the right of survivorship becomes the property of the remaining
principal(s).
6An advance is simply "the furnishing of money or goods before any
consideration is received in return." Black’s Law Dictionary 53 (7th ed.
1999). Southside "advanced" funds when it extended credit to its custom-
ers in good standing on checks deposited from other banks before those
checks cleared, i.e., prior to payment of those checks by the other banks.
7For ease of reference, we refer to each individual Wheat First check
containing William’s forged endorsement as a "Forged Check," and we
refer to the twelve forged checks that provided the basis for Elliott’s
§ 1014 convictions collectively as the "Forged Checks."
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diately after she deposited them at Southside. In its Opinion, the court
found that Elliott presented the Forged Checks to Southside "desiring
and knowing that she would receive immediate credit for the deposit
of said checks." Id. at 10. The court based this finding on the fact that
Elliott "wrote checks [drawn on the Elliott/Furlong Account] on the
same day as the deposits were made for a greater amount than existed
in the [Elliott/Furlong Account] prior to the deposits being made." Id.
The court further found that these advances "ultimately went to
[Elliott] for her own personal benefit." Id. at 11. In short, on twelve
separate occasions, Elliott deposited a Forged Check in the
Elliott/Furlong Account in order to obtain an "advance" on the funds
from Southside. The total value of the Forged Checks was more than
$225,000, which was credited to the Elliott/Furlong Account. Elliott
utilized over $90,000 of the advanced funds, i.e., she spent more than
$90,000 of the funds from the deposited Forged Checks before those
checks had cleared.8
8In one instance, on May 20, 1994, Elliott directed Wheat First to issue
a check in the sum of $30,571. On May 22, 1994, before depositing this
check, Elliott wrote a check payable to herself on the Elliott/Furlong
Account, in the sum of $26,500, when that account had a balance of only
$861. The following day, May 23, 1994, Elliott deposited the $30,571
Wheat First check, bearing William’s forged endorsement, into the
Elliott/Furlong Account. That same day, Elliott deposited the $26,500
Elliott/Furlong Account check into the Southside account she held with
her husband. This activity resulted in Elliott’s conviction on Count 35 of
the indictment.
In another instance, on January 11, 1993, Elliott wrote a check on the
Elliott/Furlong Account to Moore’s Cadillac, in the sum of $37,400 (the
"Moore’s Cadillac Check"). The Moore’s Cadillac Check, which relates
to Count 27 of the indictment, exceeded the Elliott/Furlong Account’s
balance of $3,552. The next day, January 12, 1993, Elliott had Wheat
First issue a check in the sum of $38,892. She immediately deposited this
check, bearing William’s forged endorsement (the "$38,892 Forged
Check"), into the Elliott/Furlong Account. Although the Moore’s Cadil-
lac Check was dated January 11, the day before Elliott directed Wheat
First to issue its check, the Moore’s Cadillac Check was not negotiated
until January 14, 1993, two days after Elliott had deposited the $38,892
Forged Check into the Elliott/Furlong Account. While it is unclear
whether the $38,892 Forged Check cleared before the Moore’s Cadillac
Check was negotiated, the court concluded that, in depositing the
$38,892 Forged Check, Elliott "intended to obtain an immediate credit
. . . at Southside." Opinion at 13. This conduct resulted in Elliott’s con-
viction on Count 27 of the indictment.
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On the occasion of Mr. Furlong’s funeral in December of 1995,
Elliott advised William that their father’s widow had transferred the
funds from the Wheat First Account to a separate account in her own
name. The court found that this statement was false and concluded
that the statement evidenced Elliott’s "intent to divert the funds in the
[Wheat First Account] to herself for her personal benefit." Id. William
did not learn of Elliott’s depletion of the Wheat First Account until
February of 1997, more than two years after Mr. Furlong’s death. A
federal investigation of Elliott’s activities began soon thereafter.
During the course of the investigation, Elliott attended a June 1998
meeting with the FBI. In that meeting, she acknowledged observing
"her father fraudulently endorse the [Wheat First] checks with the sig-
nature of William Furlong. She also admitted that it was likely that
she also fraudulently endorsed the [Wheat First] checks with the sig-
nature of her brother." Id. Although Elliott advised the FBI that she
used the funds to pay her father’s medical expenses, the court found
this claim "not borne out by the evidence." Id. at 12.
B.
On April 4, 2002, Elliott’s bench trial was conducted in the Eastern
District of Virginia. At trial, the district court denied Elliott’s motion
for judgment of acquittal. Following the trial, the court convicted
Elliott on twelve of the thirteen § 1014 counts (the "False Statement
Convictions"). A person violates § 1014 by "knowingly mak[ing] any
false statement . . . for the purpose of influencing in any way the
action of . . . any [FDIC-insured financial institution], . . . upon any
application, advance, discount, purchase, . . . commitment, or loan."
18 U.S.C. § 1014. The court concluded that, in order to obtain a con-
viction under § 1014, the Government was obliged to prove three
essential elements: (1) that Elliott made a false statement; (2) that
Elliott made that statement to influence a bank’s action; and (3) that
Elliott made the statement knowingly. Opinion at 12.
The court found that the Forged Checks constituted "false state-
ments" within the meaning of § 1014. It also determined that Elliott
had "deposited [the Forged Checks] with the intent to receive imme-
diate credit of and access to those funds." Id. at 13. Finally, the court
found that the false statements were knowingly made, concluding that
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Elliott "knew that her brother did not endorse the [Wheat First]
checks, yet she attempted to negotiate the checks nevertheless." Id.
Accordingly, the court found Elliott guilty on twelve counts of violat-
ing § 1014.9
On April 10, 2002, Elliott renewed her motion for judgment of
acquittal on Count 27, contending that the Government had failed to
prove that she intended to cause or influence Southside to make an
advance of funds in connection with the Moore’s Cadillac Check. See
supra note 8. The court denied the renewed motion on April 15, 2002.
C.
On September 5, 2002, the district court conducted Elliott’s sen-
tencing hearing. During the hearing, Elliott objected to several of the
recommendations contained in her pre-sentence investigation report
(the "PSR"), specifically the PSR recommendations (1) that the total
loss attributable to her criminal conduct (the "fraud loss") was
$225,768, the face value of the Forged Checks; (2) that restitution be
paid to William in the sum of $112,884, one-half of the sum of the
Forged Checks; and (3) that the court deny Elliott a two-level adjust-
ment for acceptance of responsibility (the "Responsibility Adjust-
ment"). Additionally, Elliott sought a downward departure in her
sentence so that she could care for her chronically ill husband.
At the conclusion of the sentencing hearing, the court adopted the
PSR. It overruled Elliott’s objections on the fraud loss calculation, the
restitution award, and the denial of the Responsibility Adjustment.
Elliott’s base offense level was determined to be sixteen, authorizing
a sentence of twenty-one to twenty-seven months imprisonment. PSR
at 27. Over the Government’s objection, the court granted Elliott a
four-level downward departure due to her family responsibilities. The
court then sentenced her to five months imprisonment, to be followed
9The court acquitted Elliott on the thirteenth false statement count
(Count 31 of the indictment). The court found that, although the evidence
demonstrated that she had made a "false statement" to Southside when
she deposited a Forged Check, the evidence failed to prove that she
intended, by depositing that check, to cause Southside to advance funds
to her. Opinion at 13.
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by a five-year term of supervised release. United States v. Elliott,
Judgment in a Criminal Case, CR-01-327 (E.D. Va. Sept. 6, 2002).
On September 12, 2002, Elliott moved the court for reconsideration
of the fraud loss calculation. The court denied that motion on October
9, 2002.
Elliott has appealed her convictions and two aspects of her sen-
tence. The Government has cross-appealed, contending that the court
erred in awarding Elliott the four-level downward departure. We pos-
sess jurisdiction pursuant to 28 U.S.C. § 1291.
III.
We review de novo a district court’s interpretation of the essential
elements of 18 U.S.C. § 1014. See United States v. Wills, 234 F.3d
174, 176 (4th Cir. 2000) ("We review the interpretation of a statute
de novo."). In assessing the sufficiency of the evidence presented in
a bench trial, we must uphold a guilty verdict if, taking the view most
favorable to the Government, there is substantial evidence to support
the verdict. United States v. Ismail, 97 F.3d 50, 55 (4th Cir. 1996)
(quoting Glasser v. United States, 315 U.S. 60, 80 (1942)).
In considering challenges to a sentencing court’s application of the
Guidelines, we review factual determinations for clear error and legal
issues de novo. United States v. Singh, 54 F.3d 1182, 1190 (4th Cir.
1995). The determination of whether a defendant is entitled to the
Responsibility Adjustment "is clearly a factual issue and thus review-
able under a clearly erroneous standard." United States v. White, 875
F.2d 427, 431 (4th Cir. 1989). We are mindful that "[t]he sentencing
judge is in a unique position to evaluate a defendant’s acceptance of
responsibility," and thus that "the determination of the sentencing
judge is entitled to great deference on review." U.S.S.G. § 3E1.1, cmt.
n.5.
A sentencing court’s interpretation of the term "loss" under the
Guidelines is a legal issue, and hence is reviewed de novo. United
States v. Miller, 316 F.3d 495, 498 (4th Cir. 2003). The propriety of
the court’s calculation of loss, however, is a question of fact, which
we review for clear error. United States v. Godwin, 272 F.3d 659, 671
(4th Cir. 2001).
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Finally, we review for abuse of discretion a sentencing court’s
decision to depart downward from the applicable Guideline range.
Koon v. United States, 518 U.S. 81, 91 (1996); United States v. Ry-
bicki, 96 F.3d 754, 756-57 (4th Cir. 1996). Under Koon, a court’s
decision to depart is generally entitled to "substantial deference, for
it embodies the traditional exercise of discretion by a sentencing
court." 518 U.S. at 98.
IV.
A.
Elliott raises several challenges to her False Statement Convictions.
She first contends that a check with a forged endorsement is not a
"false statement" within the meaning of 18 U.S.C. § 1014. Secondly,
she maintains that the Forged Checks were not presented to Southside
for the purpose of "influencing" Southside’s actions. Next, she con-
tends that, in order to prove a § 1014 violation, the Government is
obliged to demonstrate that the financial institution was at a risk of
financial loss due to the false statement. Finally, Elliott contends that,
assuming her conduct is implicated by § 1014, there was insufficient
evidence to convict her on Count 27.
1.
Elliott first asserts that her False Statement Convictions must be
reversed because a forged endorsement does not constitute a false
statement under § 1014. In particular, she maintains that a check does
not constitute a factual assertion under the statute, and that a forged
endorsement on a check therefore cannot be a "false statement."
In support of her contention, Elliott relies almost exclusively on the
Supreme Court’s decision in Williams v. United States, 458 U.S. 279
(1982). There, defendant Williams had engaged in a "check kiting"
scheme, knowingly writing checks against an account that contained
insufficient funds.10 The Williams Court determined that "a check is
10"Check kiting" is "the practice of playing one checking account
against another, taking advantage of bank processing delays." United
States v. Turner, 312 F.3d 1137, 1139 n.1 (9th Cir. 2002). By carefully
timing deposits and withdrawals, a person is able to create "the appear-
ance of funds present and immediately available for withdrawal in an
account, when none in fact are there." Id.
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not a factual assertion at all, and therefore cannot be characterized as
‘true’ or ‘false.’" Id. at 284. A check, the Court observed, does not
"make any representation as to the state of [the drawer’s] bank bal-
ance," but instead simply "contains an unconditional promise or order
to pay a sum certain in money." Id. at 284-85 (internal quotation
marks omitted). The Court therefore reversed Williams’s § 1014 con-
victions, concluding that the statute was not "intended to put the Fed-
eral Government in the business of policing the deposit of bad
checks." Id. at 290 (internal quotation marks omitted).
There is a fundamental difference, however, between checks drawn
on an account containing insufficient funds, on the one hand, and
affirmative misrepresentations made on the check itself, on the other.
As the Fifth Circuit has concluded, "Williams does not govern a situa-
tion in which some information on the check, such as a false signa-
ture, or a fictitious bank, is itself a false statement." United States v.
Hord, 6 F.3d 276, 285 (5th Cir. 1993) (internal quotation marks omit-
ted). In the Fifth Circuit case, Hord had bought blank checks and a
machine that encoded routing numbers, and he had used them to print
bogus checks. The Fifth Circuit upheld Hord’s § 1014 convictions,
concluding that the holding of Williams is applicable only to "the sim-
ple presentation of a check drawn on an account with insufficient
funds." Id. at 286 (internal quotation marks omitted).
The Fifth Circuit is not alone in its interpretation and application
of Williams. In fact, our Court has observed that "there is nothing in
Williams that equates the passing of checks drawn on accounts with
insufficient funds with fraudulently making or altering a document."
United States v. Price, 763 F.2d 640, 643 (4th Cir. 1985); see also
United States v. Falcone, 934 F.2d 1528, 1541 (11th Cir.), reh’g
granted & opinion vacated, 939 F.2d 1455 (11th Cir.), opinion rein-
stated on reh’g, 960 F.2d 988 (11th Cir. 1991) ("Most courts, includ-
ing our own, . . . have declined to read Williams broadly to require
the reversal of convictions in situations other than those involving
insufficient-funds checks."); United States v. Worthington, 822 F.2d
315, 316 (2d Cir. 1987) (concluding that printing name of nonexistent
drawee bank on check "fits squarely within the dictionary definition
of ‘false statement’"). In our Price decision, the defendant had been
convicted under § 1014 for depositing false credit card sales receipts
into an FDIC-insured financial institution. We upheld Price’s convic-
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tions, concluding that, "unlike the checks in Williams which carried
with them no representation, express or otherwise, as to the drawer’s
account balance, the credit card sales receipts . . . carried with them
express false representations concerning the credit card account num-
bers, the account owners, and the amounts of purchase." Price, 763
F.2d at 643.
Pursuant to the foregoing, an affirmative misrepresentation set
forth on a check, as opposed to a check drawn on an account contain-
ing insufficient funds, constitutes a "false statement" under § 1014.
Accordingly, the district court, on the evidence before it, did not err
in concluding that Elliott had made false statements when she pres-
ented the Forged Checks to Southside.
2.
Elliott next challenges her False Statement Convictions on the
basis that, even if the forged endorsements constituted false state-
ments, her presentation of the Forged Checks did not satisfy the sec-
ond element of § 1014, i.e., the checks were not deposited for the
purpose of influencing Southside’s actions "upon any . . . advance."
In making this contention, Elliott again relies on the Williams deci-
sion. There, the Court observed that nothing in the legislative history
of § 1014 "suggested that the statute should be applicable to anything
other than representations made in connection with conventional loan
or related transactions." Williams, 458 U.S. at 288-89. Elliott main-
tains that her receipt of "immediate credit for the deposit" of the
Forged Checks was not a conventional loan or related transaction, and
that her convictions must therefore be reversed.
Elliott’s contention fails, however, because the advances that
Southside provided Elliott are plainly within the scope of the "related
transactions" contemplated by the Williams decision. Section 1014
criminalizes the making of a false statement "for the purpose of influ-
encing in any way the action of [an FDIC-insured financial institu-
tion] upon any application, advance, discount, purchase, purchase
agreement, repurchase agreement, commitment, or loan." 18 U.S.C.
§ 1014 (emphasis added). This broad statutory provision expressly
applies when a false statement is made for the purpose of influencing
the action of an FDIC-insured financial institution upon an "advance."
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On similar facts, the Fifth Circuit held in Hord that, "acting to induce
a bank to ‘credit an account’ can, under certain circumstances, be
equivalent to acting to induce it to make an advance, commitment, or
loan." 6 F.3d at 283-84. When a financial institution provides its cus-
tomer with access to funds before the customer’s deposit clears, the
institution "is making an advance on the security of the checks it
holds for collection." Id. at 284.
After hearing the evidence, the district court found that Elliott had
presented the Forged Checks to Southside "desiring and knowing that
she would receive immediate credit for the deposit of said checks."
Opinion at 10. Thus, presentation of the Forged Checks constituted
false statements "for the purpose of influencing" Southside to "ad-
vance" Elliott the value of those checks. As a result, Elliott’s chal-
lenge to the False Statement Convictions on this basis must fail.
3.
Elliott next maintains that, under § 1014, the Government is
required to prove that the financial institution suffered a risk of finan-
cial loss. Elliott premises her argument on the requirement that, in
order to prove bank fraud under 18 U.S.C. § 1344, the Government
must show that a financial institution was at risk of financial loss.11
See United States v. Brandon, 298 F.3d 307, 312 (4th Cir. 2002)
(observing that, pursuant to § 1344, "it is sufficient for the govern-
ment to show that a financial institution was exposed to an actual or
potential risk of loss" (internal quotation marks omitted)). She con-
tends that we should read this § 1344 element into § 1014, and she
maintains that, in this instance, Southside was never at risk of any
such loss.
Risk of loss is not an express statutory requirement for conviction
under either § 1344 or § 1014. But because we have held that risk of
11Section 1344 of Title 18, in pertinent part, renders criminally liable:
(a) Whoever knowingly executes, or attempts to execute, a
scheme or artifice—
(1) to defraud a financial institution . . . .
18 U.S.C. § 1344(a)(1).
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financial loss must be proven under § 1344, Elliott contends it would
be illogical not to require such proof under § 1014. We disagree. Sec-
tion 1344 criminalizes the execution of a scheme to defraud a finan-
cial institution, while § 1014 criminalizes the making of a false
statement to a financial institution "for the purpose of influencing in
any way the action of" the institution with regard to, for example, an
advance or a loan. The term "defraud" signifies "the deprivation of
something of value by trick," see United States v. Orr, 932 F.2d 330,
332 (4th Cir. 1991) (internal quotation marks omitted), thus implying
the need to demonstrate a risk of financial loss. "Influence," on the
other hand, bears no such connotation. These statutes are fundamen-
tally different, and the element read by the courts into § 1344 — that
a financial institution be put at risk of financial loss — does not com-
pel us to read that same element into § 1014.
Our assessment of § 1014 finds support in Supreme Court prece-
dent. The Court has concluded that, under § 1014, a false statement
need not be material to a financial institution’s decision to advance or
loan funds. United States v. Wells, 519 U.S. 482, 490 (1997)
("Nowhere does [§ 1014] say that a material fact must be the subject
of the false statement or so much as mention materiality."). It is diffi-
cult to discern how any immaterial false statement, i.e., a statement
incapable of influencing a financial institution, see id. at 489, could
possibly place such an institution at any risk of financial loss. Because
materiality is not an essential element of § 1014, it would be nonsen-
sical for us to require the Government to nonetheless prove that the
financial institution faced a risk of financial loss. We decline to do so.
4.
Finally, as regards her False Statement Convictions, Elliott con-
tends that there was insufficient evidence to support her conviction on
Count 27 of the indictment. See supra note 8. With respect to her
other False Statement Convictions, the Government demonstrated
that, when Elliott deposited a particular Forged Check in the
Elliott/Furlong Account, she also wrote checks on that account "ex-
ceeding the pre-deposit account balance, which were posted . . . on
the same day as the deposit was made." Opinion at 13. With respect
to Count 27, by contrast, no check was posted on the day of the rele-
vant Forged Check deposit. Rather, on January 11, 1993, Elliott wrote
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the Moore’s Cadillac Check for $37,400 on the Elliott/Furlong
Account, even though the account balance was only $3,552. The next
day, January 12, 1993, she directed Wheat First to issue a check in
the sum of $38,892. After William’s endorsement was forged thereon,
she deposited that check into the Elliott/Furlong Account. It was not
until January 14, 1993, that the Moore’s Cadillac Check was negoti-
ated. Elliott asserts that, because the Elliott/Furlong Account did not
fall below its pre-deposit limit until two days after the $38,892 Forged
Check was deposited, the evidence was insufficient to prove that she
intended to "influence" Southside to make an advance.
The court found that Elliott had deposited each of the Forged
Checks into the Elliott/Furlong Account "desiring and knowing that
she would receive immediate credit for the deposit of said checks."
Id. at 10. In depositing the Wheat First check underlying Count 27,
Elliott received immediate credit from Southside in the full amount
thereof. It is immaterial under § 1014 whether Elliott utilized the
advanced funds; it is relevant only that Elliott’s purpose in depositing
the $38,892 Forged Check was to influence Southside to make the
advance. 18 U.S.C. § 1014 (violation occurs when a person "know-
ingly makes any false statement . . . for the purpose of influencing in
any way the action of . . . [an FDIC-insured financial institution] . . .
upon any . . . advance"). Viewed in the light most favorable to the
Government, the facts relating to the Moore’s Cadillac Check show
that Elliott deposited the $38,892 Forged Check for the purpose of
causing Southside to advance her funds. In these circumstances, we
affirm Elliott’s conviction on Count 27.
B.
Elliott also challenges her sentence in two respects. Specifically,
she maintains that the court erred both in denying her the Responsibil-
ity Adjustment and in calculating her fraud loss. We address each of
these contentions in turn.
1.
Elliott first challenges the district court’s refusal to award her the
Responsibility Adjustment, pursuant to U.S.S.G. § 3E1.1 (1993). She
maintains that she never contested the facts underlying her False
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Statement Convictions, and that she argued at trial only that her con-
duct did not, as a matter of law, contravene § 1014. The Government
asserts, by contrast, that Elliott never accepted full responsibility for
her conduct, and that she falsely denied her relevant conduct (pursu-
ant to U.S.S.G. § 1B1.3). Under such circumstances, the Government
insists, the court did not clearly err in refusing to award her the
Responsibility Adjustment.
Section 3E1.1 of the Guidelines provides that a defendant who
"clearly demonstrates acceptance of responsibility for his offense" is
entitled to a two-level reduction in his base offense level. U.S.S.G.
§ 3E1.1. Generally, this adjustment is inappropriate where "a defen-
dant . . . puts the government to its burden of proof at trial by denying
the essential factual elements of guilt." Id. at § 3E1.1, cmt. n.2. In rare
cases, however, a defendant may exercise his right to trial and yet
nevertheless be entitled to the Responsibility Adjustment. Such a situ-
ation occurs "where a defendant goes to trial to assert and preserve
issues that do not relate to factual guilt (e.g., to make a constitutional
challenge to a statute or a challenge to the applicability of a statute
to his conduct)." Id.
The PSR recommended against Elliott receiving the Responsibility
Adjustment. In her first post-trial interview with the probation officer,
Elliott "made no statement concerning the instant offense upon the
advice of counsel." PSR at 17. At a second interview, she submitted
a written statement to the probation officer, stating in part:
I accept responsibility for depositing checks into Southside
Bank for the purpose of receiving immediate credit for
funds without waiting for the checks to clear, thus putting
the bank in the position of risk. . . . I witnessed my father
sign these checks for my brother. I accept responsibility
that, without knowing whether or not my father had Power
of Attorney for my brother; in retrospect these checks may
have constituted a false statement to Southside Bank. . . .
PSR at 17-18. The probation officer concluded that Elliott’s "written
statement, combined with the facts and circumstances of this case,
fail[ed] to meet the threshold required for an adjustment for Accep-
tance of Responsibility." Id. at 18. In response to Elliott’s objection
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to the PSR, the probation officer maintained that, "although the defen-
dant may have proceeded to trial to preserve either a constitutional or
legal issue, the defendant [had] not adequately admitted to her crimi-
nal conduct as required to receive this adjustment." Id. at A-2.
The court overruled Elliott’s objection to the PSR’s recommenda-
tion that the Responsibility Adjustment be denied. In so doing, the
court stated that, "of course, the defendant has a right to say basically
what she has said, ‘I didn’t do it,’ and live with that. But she is not
entitled to Acceptance of Responsibility based on these facts."
The commentary to the Guidelines explains that, in order to be eli-
gible for the Responsibility Adjustment, "a defendant is not required
to volunteer, or affirmatively admit, relevant conduct beyond the
offense of conviction . . . . However, a defendant who falsely denies,
or frivolously contests, relevant conduct that the court determines to
be true has acted in a manner inconsistent with acceptance of respon-
sibility." U.S.S.G. § 3E1.1, cmt. n.1. Elliott asserts that the court, in
declining to award her the Responsibility Adjustment, was requiring
that she admit to relevant conduct beyond the offense of conviction.
She contends that, contrary to the court’s conclusion, her acceptance
of responsibility was clearly demonstrated by the facts that: (1) she
offered to agree to numerous stipulations, including that William did
not sign the Forged Checks; (2) she neither took the stand nor called
any witnesses to dispute the evidence presented by the Government;
and (3) she admitted to the essential elements of her convictions in
the statement submitted to the probation officer.
Elliott is correct that, under the Guidelines, she would be entitled
to the Responsibility Adjustment, despite exercising her right to trial,
if she admitted the factual elements of the charges against her and did
not falsely deny her relevant conduct. However, Elliott did falsely
deny certain aspects of her relevant conduct. In her 1998 FBI inter-
view, Elliott admitted both that she had observed her father endorse
several Wheat First checks with her brother’s signature, and that it
was likely that she also fraudulently endorsed some Wheat First
checks with William’s signature. After trial, however, she admitted to
the probation officer only that she had "witnessed [her] father sign
these checks for [her] brother," thus implicitly denying her own, pre-
viously acknowledged role in the forgeries. PSR at 17-18. Pursuant
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to the Guidelines, a denial of relevant conduct is "inconsistent with
acceptance of responsibility." U.S.S.G. § 3E1.1, cmt. n.1. Because of
the sentencing court’s "unique position" in evaluating an issue of
acceptance of responsibility, and according the court the "great defer-
ence" to which it is entitled, it did not clearly err in denying Elliott
the Responsibility Adjustment. See id. § 3E1.1, cmt. n.5.
2.
Elliott lastly contends that the court erred in calculating the fraud
loss attributable to her conduct. She asserts that the court erroneously
considered William, rather than Southside, to be the "victim" of her
crime and that, as a result, the fraud loss was overstated. Elliott main-
tains that, had the court properly recognized Southside as the victim,
it would have found the fraud loss to be zero. The Government
responds that the court properly deemed William a victim, and hence
that it correctly calculated the fraud loss at $225,768, the face value
of the Forged Checks.
Pursuant to § 2F1.1(b)(1) of the applicable 1993 Guidelines,12 a
sentencing court is obliged to calculate the offense level of a defen-
dant convicted of a crime involving fraud or deceit on the basis of the
amount of loss resulting from the scheme. The Guidelines’ commen-
tary explains that the applicable fraud loss "need not be determined
with precision." U.S.S.G. § 2B1.1, cmt. n.3. A sentencing court must
simply "make a reasonable estimate of the loss, given the available
information." Id.
In Elliott’s PSR, the probation officer recommended that the fraud
12Although a sentencing court generally is required to apply the Guide-
lines Manual that is in effect on the date of sentencing, it must instead
apply the Guidelines Manual "in effect on the date that the offense of
conviction was committed," if it determines that use of the Guidelines
Manual "in effect on the date that the defendant is sentenced would vio-
late the ex post facto clause of the United States Constitution." U.S.S.G.
§ 1B1.11. The PSR recommended application of the 1993 Guidelines
Manual because the Guidelines Manual in effect at the time of sentenc-
ing was "less advantageous to the defendant." PSR at 30. The district
court adopted the PSR, and thus it applied the 1993 Guidelines Manual.
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loss be calculated as the face value of the Forged Checks. The PSR
determined that the "victim" of the offense was William, and "that the
actual or intended loss [was] the amount of the cashed checks consti-
tuting the counts of conviction."13 PSR at A-1. Elliott objected to this
fraud loss calculation, asserting that the victim of her criminal activity
was Southside, which had suffered no loss. The court overruled
Elliott’s objection on this point and adopted the PSR.
In calculating fraud loss, a sentencing court must determine what
sum the defendant extracted, or attempted to extract, through commis-
sion of his or her offense. Under the Guidelines, the "offense"
includes not only the offense of conviction, but also all relevant con-
duct. U.S.S.G. § 1B1.1, cmt. n.1(l). And relevant conduct includes
"all acts and omissions committed . . . by the defendant . . . that
occurred during the commission of the offense of conviction." Id.
§ 1B1.3(a)(1). Elliott’s actions in improperly obtaining funds from the
Wheat First Account occurred "during the commission of [her]
offense of conviction." Id. Accordingly, it was appropriate for the
court, in calculating the fraud loss, to consider not only the losses suf-
fered by Southside, but also those suffered by William and Mr. Fur-
long as well.
Elliott also asserts that, even if the court could properly consider
the losses of William and Mr. Furlong, the full value of the Forged
Checks is not the appropriate fraud loss sum because she held an
ownership interest in the Wheat First Account. To the contrary, Elliott
had no legal right to any of the funds in the Wheat First Account,
absent William’s valid endorsement. Under Virginia law, a joint
account "belongs, during the lifetimes of all parties, to the parties in
proportion to the net contributions by each to the sums on deposit."
Va. Code Ann. § 6.1-125.3. Here, Mr. Furlong was responsible for all
of the deposits made to the Wheat First Account and, accordingly, the
funds in that account "belonged" to him. Unless and until each of the
three principals endorsed the checks on the Wheat First Account,
Elliott had no ownership interest in the funds. Thus, the court appro-
priately utilized the full value of the Forged Checks in calculating the
fraud loss.
13The Guidelines provide that the "loss" is the greater of the actual loss
or the intended loss. U.S.S.G. § 2F1.1, cmt. n.7.
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V.
Finally, the Government has cross-appealed Elliott’s sentence,
maintaining that the court abused its discretion in departing down-
ward four levels on the basis of Elliott’s family responsibilities.
Elliott responds that it was proper for the court to award her the
downward departure since she is the primary caregiver for her chroni-
cally ill husband.
Pursuant to the Guidelines, a sentencing court is ordinarily required
to impose sentences within the applicable Guideline range. The
Guidelines seek "to anticipate a broad range of typical cases — a
‘heartland’ — that is representative of the circumstances and conse-
quences of ordinary crimes of the type to which the guideline
applies." Rybicki, 96 F.3d at 757. A sentencing court may depart from
the applicable range only when it "finds that there exists an aggravat-
ing or mitigating circumstance of a kind, or to a degree, not ade-
quately taken into consideration by the Sentencing Commission in
formulating the guidelines." United States v. Wilson, 114 F.3d 429,
432 (4th Cir. 1997) (internal quotation marks omitted).
In determining whether a departure is appropriate, the sentencing
court must first establish "whether the potential basis for departure
was forbidden, encouraged, discouraged, or unmentioned by the
Commission." Id. at 433. Here, the court departed on the basis of
Elliott’s family responsibilities, namely, her role as the primary care-
giver for her ill husband. In this regard, the Guidelines provide that
"[f]amily ties and responsibilities . . . are not ordinarily relevant in
determining whether a sentence should be outside the applicable
guideline range." U.S.S.G. § 5H1.6. Accordingly, the basis used by
the court for Elliott’s departure is a "discouraged" factor. Where a
factor is discouraged, "the court should depart only if the factor is
present to an exceptional degree or in some other way makes the case
different from the ordinary case where the factor is present." Koon,
518 U.S. at 96. We have previously determined that a departure on
the basis of family responsibilities is "permitted only upon a finding
that the defendant’s family ties or responsibilities are extraordinary."
Wilson, 114 F.3d at 434.
At her sentencing hearing, Elliott moved for a downward departure
on the basis of several factors. Following its consideration of Elliott’s
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argument and the Government’s objection, the court granted the
downward departure, stating:
The one thing that did move me was the health and care of
the family member, which is an appropriate basis for depar-
ture. And what I am going to do is depart downward by four
from a Level 16 to a Level 12, which will give me a little
bit more flexibility when it comes to imposing the sentence.
In so ruling, however, the court failed to make any findings regarding
the severity of the family member’s illness, or the nature of the care
that Elliott provides for him.
The court heard evidence that Elliott’s husband, Joseph, had suf-
fered a massive heart attack in 1996; that he required five-way bypass
surgery; and that he was subsequently diagnosed with cancer. Joseph
had undergone extensive radiation and chemotherapy treatment for
cancer, and as a result, he continued to suffer "severe periods of con-
fusion and memory loss." At the time of sentencing, the cancer was
apparently in partial remission. Approximately a month before the
sentencing hearing, however, Joseph was diagnosed with diabetes.
According to the evidence, Elliott was Joseph’s primary caregiver,
and due to his incapacity, his memory loss, and his confusion, she
was responsible for administering his medication and supervising him
on a daily basis.
A downward departure for family responsibilities is permissible
only where the court finds that the family responsibilities are "ex-
traordinary." See Wilson, 114 F.3d at 434. Generally, a sentencing
court may depart downward on this basis only if it finds that the
defendant is essentially "irreplaceable." See United States v. McClat-
chey, 316 F.3d 1122, 1133 (10th Cir. 2003) (reversing downward
departure for defendant to care for his son because nothing in record
"suggest[ed] that another individual could not provide the necessary
assistance in [defendant’s] absence"); United States v. Pereira, 272
F.3d 76, 82 (1st Cir. 2001) (reversing downward departure because
"[t]he nature of the care that [defendant] renders (shopping, cleaning,
food preparation, etc.) is not so highly specialized as to make him dif-
ficult to replace"); United States v. Sweeting, 213 F.3d 95, 104 (3d
Cir. 2000) (reversing downward departure based on responsibility in
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caring for child with Tourette’s Syndrome because nothing indicated
that the defendant was "so irreplaceable that her otherwise ordinary
family . . . responsibilities are transformed into the ‘extraordinary’").
Although we sympathize with Elliott’s situation, this record fails to
demonstrate that the care she provides to Joseph is "irreplaceable."
See Rybicki, 96 F.3d at 759 (reversing downward departure granted
on basis of family responsibilities because record did not indicate that
factor was present to exceptional degree). To the contrary, the record
reflects that Elliott has a strong family and community support net-
work, evidenced by the testimony of her daughter and granddaughter,
and by affidavits of, among others, her son-in-law and various
friends. In fact, Elliott’s son-in-law stated by affidavit that both Elliott
and Joseph "are welcome to live with [him and his wife] if the need
arises." Indeed, in sentencing Elliott to five months of imprisonment,
the court acknowledged that Elliott is able to rely on others to care
for Joseph. See Pereira, 272 F.3d at 83 (concluding that, by requiring
defendant be confined to home every weekend, court "acknowledged
. . . that [defendant] was able to rely on others to care for his parents
in his absence"). In these circumstances, the sentencing court abused
its discretion in granting Elliott a four-level downward departure, and
we reverse that aspect of Elliott’s sentence.
VI.
Pursuant to the foregoing, we affirm Elliott’s False Statement Con-
victions, the court’s fraud loss calculation, and its denial of the
Responsibility Adjustment. We reverse the downward departure to
Elliott based on her family responsibilities, we vacate her sentence,
and we remand for resentencing.
AFFIRMED IN PART, REVERSED IN PART,
VACATED IN PART, AND REMANDED
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