United States v. Geevers

Opinions of the United

2000 Decisions States Court of Appeals

for the Third Circuit

8-18-2000

United States v. Geevers

Precedential or Non-Precedential:

Docket 99-5155

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Filed August 18, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NO. 99-5155

UNITED STATES OF AMERICA

v.

MARTIN GEEVERS, Appellant

On Appeal From the United States District Court

For the District of New Jersey

(D.C. Crim. No. 98-cr-00213)

District Judge: Honorable Mary Little Cooper

Argued: March 10, 2000

Before: BECKER, Chief Judge, NYGAARD and

GARWOOD,* Circuit Judges.

(Filed: August 18, 2000)

MARK A. BERMAN, ESQUIRE

(ARGUED)

Gibbons, Del Deo, Dolan, Griffinger

& Vecchione

One Riverfront Plaza

Newark, NJ 07102

Counsel for Appellant

_________________________________________________________________

* Honorable Will L. Garwood, United States Circuit Judge for the Fifth

Circuit, sitting by designation.

ROBERT J. CLEARY, ESQUIRE

United States Attorney

GEORGE S. LEONE, ESQUIRE

(ARGUED)

Assistant United States Attorney

LEWIS S. BORINSKY, ESQUIRE

Assistant United States Attorney

970 Broad Street

Newark, NJ 07102-2535

Counsel for Appellee

OPINION OF THE COURT

BECKER, Chief Judge.

The appeal of Martin Geevers, who pleaded guilty to one

count of bank fraud arising out of a check kiting scheme,

requires us to determine once again when application of the

Sentencing Guidelines may result in the imposition of a

sentence on the basis of intended loss when the actual loss

was significantly less. Geevers argues that because a passer

of worthless checks could not possibly abscond with the

full face amount of his worthless deposits, the District

Court erred in calculating his intended loss under a"worst

case" scenario. Though Geevers's argument possesses

strong intuitive appeal, we will uphold the District Court's

full face amount finding.

We base our conclusion on three separate considerations.

First, we note that there is a distinction between intending

a loss and expecting a loss. While we agree that Geevers

may not have reasonably expected to extract the full face

value of his fraudulent checks from the banks, it does not

necessarily follow that he did not intend to extract every

cent possible. Second, the commentary to S 2F1.1 makes

clear that losses "need not be determined with precision."

U.S.S.G. S 2F1.1 Application Note 9. A district court is

therefore not barred from considering the full amount of the

fraudulent checks to be the intended loss although that

figure may overstate the actual intended figure. Finally, our

precedent allows some limited burden shifting in the

2

proving of intended loss under the guidelines. We have

previously recognized that though the government bears the

burden of proof in guidelines cases, the burden of

production may shift to the defendant once the government

presents prima facie evidence of a given loss figure. See

United States v. Evans, 155 F.3d 245, 253 (3d Cir. 1998).

Under this regime, intended loss does not equal the face

value of the deposited checks as a matter of law. Rather, a

defendant is free to proffer evidence about his or her true

intentions in order to rebut the presumption that his or her

fraudulent deposits may create. A district court does not,

however, commit error when, in the absence of sufficient

evidence to the contrary, it fixes the guidelines range based

upon a presumption that the defendant intended to defraud

the banks of the full face amount of the worthless checks.

Geevers also contends that if the District Court correctly

calculated the intended loss figure from his check passing

activities, he still should have received a three-level

reduction in his guidelines calculation because he had not

completed his attempt. This argument raises questions

about the interpretation of U.S.S.G. S 2X1.1 and its relation

to the guideline on intended loss, but we reject Geevers's

contention. The guideline clearly precludes granting a

downward departure in situations in which the attempted

conduct was prevented solely through the intervention of

the victim or law enforcement. Because such is the case

here, we conclude that Geevers is ineligible for the

downward departure.

I.

Pursuant to a plea agreement, Geevers pleaded guilty to

a violation of 18 U.S.C. S 1344 (bank fraud) for opening a

bank account at Bankers Savings bank in Woodbridge, New

Jersey, with a $75,000 check drawn on a closed account at

Merrill Lynch. Merrill Lynch advised Bankers Savings that

the check was not covered by sufficient funds, and Bankers

Savings closed Geevers's account before he attempted to

draw any funds on the account. Though this transaction

produced no loss to the involved banks, it was just one of

many attempts by Geevers to profit by fraudulently inflating

bank balances. Between 1996 and 1997, according to the

3

Presentence Investigation Report ("PSI"), Geevers repeatedly

opened accounts in various banks by depositing checks

from closed accounts or accounts with insufficient funds

and then attempted to withdraw or transfer a portion of the

deposited funds before the victim banks realized that the

funds were not backed.

All told, including both offense conduct and relevant

conduct recounted in the PSI, Geevers deposited or sought

to cash checks with face values approximating $2,000,000

in total. Prior to his apprehension, he attempted to

withdraw or transfer about $400,000. He actually managed

to withdraw or transfer over $160,000. The PSI also

included as relevant conduct the losses arising from a

fraudulent real estate scheme he perpetrated several years

earlier.

The parties agreed that the sentence would be calculated

under U.S.S.G. S 2F1.1, which is the guideline covering

offenses of fraud or deceit.1 For purposes of calculating the

sentence, the government argued that the loss amount

relevant for sentencing should be the total face value of

Geevers's deposited checks, which is the potential loss.

Geevers maintained that he did not intend to cause the full

_________________________________________________________________

1. The Guideline, in relevant part, provides:

Fraud and Deceit; Forgery; Offenses Involving Altered or

Counterfeit

Instruments Other than Counterfeit Bearer Obligations of the United

States

(a) Base Offense Level: 6

(b) Specific Offense Characteristics

(1) If the loss exceeded $2,000, increase the offense level as

follows:

Loss (Apply the Greatest) Increase in Level

. . . .

(L) More than $800,000 add 11

(M) More than $1,500,000 add 12

(N) More than $2,500,000 add 13

U.S.S.G. S 2F1.1.

4

amount of the potential loss because he could not have

successfully withdrawn those funds even if he had wanted

to. In the alternative, he maintained that because he did

not complete the acts necessary to effect that loss, he was

at least entitled to a three-level reduction of his offense

score under S 2X1.1, the guideline pertaining to attempts.

The District Court disagreed and adopted a lossfigure of

$2,188,575 and rejected the downward adjustment under

S 2X1.1. Geevers's base offense level under U.S.S.G. S 2F1.1

of 6 was therefore increased by 12 levels for a loss in excess

of $1.5 million and also by 2 levels for more than minimum

planning. It was then reduced 3 levels for acceptance of

responsibility under S 3E1.1. The resulting offense level of

17 carried an imprisonment range between 30 and 37

months, and the District Court imposed a sentence in the

middle of the range--33 months.

We have jurisdiction to review Geevers's claim that the

District Court incorrectly applied the sentencing guidelines

under 18 U.S.C. S 3742(a)(2). See United States v. Shoupe,

988 F.2d 440, 444 (3d Cir. 1993). Our review of the District

Court's interpretation and application of the guidelines is

plenary, but where the District Court's application is based

on factual conclusions, we will reverse only if its conclusion

is clearly erroneous. See United States v. Hallman, 23 F.3d

821, 823 (3d Cir. 1994).

II.

We first consider the question whether the District Court

erred in considering the face amount of Geevers's

fraudulent checks in determining the intended loss of his

scheme under S 2F1.1.2 The section establishes a base

_________________________________________________________________

2. Both parties refer to Geevers as having engaged in the crime of check

kiting, which could, under certain circumstances not present here, affect

our analysis of the amount of Geevers's intended loss. Check kiting is

traditionally defined as the

[p]ractice of writing a check against a bank account where funds

are

insufficient to cover it and hoping that before it is deposited the

necessary funds will have been deposited. Transfer of funds between

two or more banks to obtain unauthorized credit from a bank

5

offense level of 6 for crimes involving fraud or deceit, and

sets forth a range of possible increases tied to the amount

of loss that the crime involved. The commentary to the

guidelines, which is binding, see Stinson v. United States,

508 U.S. 36, 38 (1993), explains that a sentencing court is

to consider intended loss in determining the lossfigure.

"Consistent with the provisions of S 2X1.1 (Attempt,

Solicitation, or Conspiracy), if an intended loss that the

_________________________________________________________________

during the time it takes the checks to clear. In effect, a kite is

a bad

check used temporarily to obtain credit.

Black's Law Dictionary 238 (6th ed. 1990) (citations omitted). Check

kiting has also been defined as "a scheme `designed to separate the bank

from its money by tricking it into inflating bank balances and honoring

checks drawn against accounts with insufficient funds,' " United States

v. Frydenlund, 990 F.2d 822, 824 (5th Cir. 1993) (quoting United States

v. Doherty, 969 F.2d 425, 428 (7th Cir. 1992)), which more accurately

reflects what Geevers has done in the present case.

Geevers does not raise, and we therefore do not address, the issue

whether the cumulative intended loss of the checks with insufficient

funds should be reduced because parts of the fraudulent transactions

were "closed" in nature. A closed loop is the sort that is normally found

in a check kiting case. There, a worthless check of, say, $1,000 is

deposited in Bank A, and then a check drawn from Bank A is used to

open a $1,000 account in Bank B, and a check from that bank is then

presented for cash to Bank A. This process may be repeated several

times in order to sustain the kite. In such a circumstance, however, the

intended loss could still be said to be only $1,000. See United States v.

Watkins, 994 F.2d 1192, 1196 n.5 (6th Cir. 1993). Most of Geevers's

transactions do not fall within the traditional check kite format, as his

deposits and withdrawals were not part of a closed loop, in which the

same amount of money is sent to each bank in the chain and the chain

ultimately closes on itself. Though some of Geevers's false checks were

used to cover accounts from which he attempted fraudulent withdrawals,

his transactions involved varying amounts of money at numerous

different banks. The parties do not dispute the manner in which the

District Court aggregated these transactions, as they suffice, in

combination with the other relevant conduct, to reach the guideline

figure arrived at by the District Court regardless of whether Geevers's

efforts are taken at face value or as failed attempts to create closed

loops

as occurs in a typical check kite. The only issue with which we must

contend, therefore, is whether the amounts charged against Geevers may

be considered as part of his intended loss.

6

defendant was attempting to inflict can be determined, this

figure will be used if it is greater than the actual loss."

U.S.S.G. S 2F1.1 Application Note 8. Note 9 explains that

"the loss need not be determined with precision. The court

need only make a reasonable estimate of the loss, given the

available information."

At his sentencing hearing, Geevers contended that the

face amount of the deposited checks cannot be thefigure

employed in sentencing because no reasonable check kiter

would think that he or she could get away with

withdrawing the full face amount of the checks. Pointing to

the difficulty of calculating a more precise figure of

intended loss, the District Court rejected Geevers's

argument.

I think I grasp your argument, but I find it difficult to

ascertain how a Court would be able to determine what

the intended loss was in a check kiting scheme, except

to take the defendant at his actions, which is to count

the full amount of any fraudulent checks from the time

that the fraudulent check is deposited. I mean, there's

no rule of thumb that the Court can come up with and

say well, your typical check kiter is only going to net 5

percent or 15 percent of what he's deposited by way of

phoney checks. And really that's what you're asking

the Court to try to figure out.

App. 58.

Geevers renews this argument on appeal. His argument

can be broken into two related contentions: 1. The

government has not proved that he intended to take the

face value of the false checks; and 2. He could not have

possibly taken that much, and the intended amount should

therefore not reflect an impossible amount. We will consider

these contentions in turn, but first we pause to address the

import of United States v. Torres, 209 F.3d 308 (3d Cir.

2000), filed after oral argument in this case.

A.

In Torres, the defendant, posing as another individual,

opened a money market account at a bank with the deposit

7

of a worthless third-party check in the value of $240.65. On

the same day, another party to the conspiracy, using the

same false name, deposited a stolen U.S. Treasury check in

the amount of $66,021.94 in the same account. The

defendant was arrested after attempting to withdraw

$24,900 from the account and was convicted of one count

of bank fraud in violation of 18 U.S.C. S 1344. See id. at

310. The district court calculated his attempted loss as

being $66,262.59, that is, the combination of the two

deposits, despite the defendant's contention that the proper

amount was the $24,900 he actually attempted to

withdraw. We affirmed, ruling that "[i]t was eminently

reasonable for the District Court to infer that Torres

intended to withdraw the balance of the deposits before the

stolen check surfaced as stolen and would have done so

had he not been arrested." Id. at 312.

Though it affirmed the entire calculation of the loss

amount, the Torres panel did not address whether there

was any difference between the intent behind depositing a

worthless check, the issue before us, and depositing a

stolen one. For purposes of that appeal, any distinction

would have been irrelevant to the holding, as it was the

value of the stolen check (in excess of $66,000) that placed

the defendant into the challenged sentence range, while the

worthless check (worth only $240.65) was not of sufficient

value to affect the guidelines. Indeed, the latter issue was

not briefed in the case.3 Moreover, though the text of the

opinion refers to the deposited check as "rubber," the facts

as recited in the opinion do not clarify whether the check

deposited was a pure fabrication or an attempt to draw

down the account of a third party. Additionally, the Torres

panel was not presented with the issue of how to address

an elaborate false check scheme with the complexity of

Geevers's.

Torres would thus not appear to be dispositive. At all

events, the extent of the precedential impact of Torres is

ultimately unimportant as we reach the same conclusion as

did that panel. Because there are differences between a

stolen and a kited check, we find it helpful to analyze and

_________________________________________________________________

3. The present opinion writer was a member of the Torres panel.

8

explain why the District Court's conclusions were

appropriate under this Court's precedent.

B.

1.

Aside from implications from Torres, our precedent offers

no clear direction on how to address a defendant in

Geevers's position.4 Nor do the guidelines or the

accompanying commentary specifically address this

situation.5 Our sister circuits are also divided on the

_________________________________________________________________

4. The government contends that we have already endorsed its position

in United States v. Shaffer, 35 F.3d 110 (3d Cir. 1994), but this is an

overstatement of that case. In Shaffer we held that in calculating the

actual loss from a check kite, the sentencing court must consider the

loss as it existed at the time of discovery, notwithstanding any future

restitution attempts. See id. at 114-15. In this regard, we distinguished

United States v. Kopp, 951 F.2d 521 (3d Cir. 1991), which, as we discuss

below, allowed such consideration for purposes of a fraudulently

obtained secured loan. See Shaffer, 35 F.3d at 114. Shaffer does not,

however, offer any guidance for the calculation of intended loss. Indeed,

though there were actual losses to the banks in Shaffer, the sentencing

court ruled that the intended loss to the banks was actually zero

because the defendant eventually planned to cover all of the checks,

which were employed in an effort to save an imperiled business. See id.

at 113. This conclusion would favor Geevers. Because we resolved

Shaffer on other grounds, we did not reach the question whether the

court's finding was clearly erroneous as alleged by the government in

that case. See id. at 113 n.4. At all events, Shaffer does not compel the

government's favored conclusion that intended loss should be equated

with the face value of Geevers's fraudulent checks.

5. The government also attempts to rely on commentary to the guidelines

to uphold the District Court, but we conclude that the proffered

examples are little help. The government claims that Application Note 8

of S 2F1.1 expressly provides that the face amount of fraudulent checks

is a proper measure of intended loss. That note gives the example of

treatment for a forged, not a kited or worthless, check. "[I]f the fraud

consisted of . . . representing that a forged check for $40,000 was

genuine, the loss would be $40,000." Though the District Court viewed

the example as analogous, it appears inapposite to Geevers's fraud.

Depositing a forged check and depositing a worthless check are different

9

matter. Compare, e.g., United States v. Watkins, 994 F.2d

1192 (6th Cir. 1993) (remanding for findings whether

defendant intended to withdraw or could have withdrawn

face value of deposited checks), with United States v.

Strozier, 981 F.2d 281 (7th Cir. 1992) (upholding equation

of face value of checks with intended loss).

Though our pre-Torres precedent is unclear, it does offer

some helpful guideposts. It is clear that a district court errs

when it simply equates potential loss with intended loss

without deeper analysis. In United States v. Kopp, 951 F.2d

521 (3d Cir. 1991), we considered the applicability of

S 2F1.1 to fraudulent misrepresentations to obtain a bank

loan, holding that loss should not be equated with potential

loss at the time of the crime. See id. at 536. In reaching

this conclusion, we stated that "[t]he fraud guideline thus

has never endorsed sentencing based on the worst-case

scenario potential loss . . ." Id. at 529 (emphasis in the

original). Moreover, we declared that equating "possible

loss" with "probable or intended loss" was a "linguistic

stretch," which we rejected. Id. at 533. Because Kopp dealt

with an equation of the amount obtained with actual or

_________________________________________________________________

crimes. Depositing a worthless check is a prelude to an attempt to draw

upon it during the interim period before the bank discovers that the

check is not backed by sufficient funds. In contrast, when one deposits

a forged check, the hope is that the bank will honor the check for the

full value and actually transfer funds from an existing account. Once

stolen in this manner, the money could be expected to remain in the

defendant's account; there is no similar interim period during which the

bank could be expected to stop payment or close the account.

The government and District Court also referred to the example under

the theft guideline S 2B1.1 n.2 of theft of a check or money order that

treat the intended loss amount as equivalent to the face value of the

check. This example and the cases, see, e.g., United States v.

Cianscewski, 894 F.2d 74 (3d Cir. 1990), that equate intended loss with

the face value of stolen checks do not resolve the issue in the

government's favor for the same reasons that the forgery example fails.

Though it is true that this Court has declared that a check kite is more

akin to theft than to a fraudulent attempt to obtain a secured loan, see

United States v. Shaffer, 35 F.3d 110, 114-15 (3d Cir. 1994), that is not

equivalent to announcing a rule for the calculation of intended loss, as

our refusal in Shaffer to reach the issue of intended loss indicates.

10

intended loss, we made no explicit holding on the meaning

of intended loss, but the quoted passages suggest that

potential loss should not be equated with the intended loss.

In United States v. Yeaman, 194 F.3d 442, 460 (3d Cir.

1999), we applied Kopp to explain that "[i]ntended loss

refers to the defendant's subjective expectation, not to the

risk of loss to which he may have exposed his victims."

Yeaman makes clear, therefore, that the government's

burden is to prove intended, not possible, loss if it seeks to

increase the guideline levels faced by the defendant under

S 2F1.1.

Though Kopp and Yeaman appear to aid Geevers's cause,

the argument that intended loss is not per se equivalent to

potential loss only takes him so far. While intended loss

may not be automatically determinable based on what the

potential loss is, intended loss may still equal potential

loss. The District Court must determine Geevers's

subjective intention, and it can draw inferences from the

nature of the crime that he sought to perpetrate.

2.

We therefore must resolve the question whether a

reasonable inference may be drawn that a defendant in

Geevers's position intends to cause the full loss of the face

value of his false checks. We hold that such an inference

may be made. Concomitantly, we conclude that the matter

is not to be determined as a question of law, but as one of

fact.

It seems likely that a defendant in Geevers's position

does not expect to obtain the full amount of his fraudulent

checks. Common sense suggests that a check kite will

always be incomplete, and that a kiter will either abscond

or be discovered before exhausting the kite. But expectation

is not synonymous with intent when a criminal does not

know what he may expect to obtain, but intends to take

what he can. We believe that a sentencing court may

plausibly conclude that a defendant like Geevers would

likely have taken the full amount of the deposited checks if

that were possible. Indeed, in one of Geevers's transactions,

11

as the government points out, Geevers was actually able to

cause a loss worth 85 percent of the amount he deposited.

To assume that Geevers did not want it all is to assume

that had one of the banks somehow failed to detect his

fraud and started sending Geevers monthly balance

reports, Geevers would have refrained from taking any more

of the money. Given Geevers's conduct, the District Court

could reject this proposition as unlikely. Though he may

not have expected to get it all, he could be presumed to

have wanted to.6 As the District Court explained, "the

actual loss sustained by the victim becomes a matter only

of how quickly and how effectively the victim shuts the

barn door before the rest of the horses have gotten out."

App. 88. We conclude that it is not an error of law for a

court to draw inferences from the face value of the checks

in arriving at the factual conclusion that the defendant

intended to let all the horses out if possible. If the

preceding is correct, then Geevers is free to come forward

with evidence to demonstrate that he actually intended

something less, but the government has made its prima

facie case.

Our ruling is consistent with our prior precedent that has

addressed the government's burden of proof when proving

subjective intent. In United States v. Evans, 155 F.3d 245,

253 (3d Cir. 1998), we stated that though the defendant

does not have to "prove the negative" vis-a-vis his absence

of intent, "the burden of production shifts to the defendant

_________________________________________________________________

6. The government made a version of this argument before the District

Court. "[T]he continuing pattern of Mr. Geevers' conduct indicates . . .

that had . . . any one of these institutions been asleep at the switch,

Mr.

Geevers would have happily continued right along in that particular

institution defrauding them of dollar after dollar for as long as the

money

continued to flow." App. 68. The facts in the PSR support this argument.

In one of Geevers's transactions recounted by the PSR, but not utilized

by the District Court as relevant conduct, the involved bank froze

Geevers's account after learning that his deposits were no good. At this

point, Geevers had already been given $40,000 worth of checks. Due to

an error, the bank then released the account and sent Geevers a

statement stating that he had a $4,000 balance remaining. According

the PSR, Geevers then wrote two checks for most of the remaining

balance.

12

once the government has made out a prima facie case." See

also United States v. Raven, 39 F.3d 428, 434-35 (3d Cir.

1994) (once the government makes a prima facie case in

sentencing, the party challenging the government's case

has the burden of coming forward with evidence at a

sentencing hearing that shows the government's evidence is

incomplete or incorrect). Of course, the burden of

persuasion always remains with the government. See

Evans, 155 F.3d at 253; Raven, 39 F.3d at 435. As

discussed above, intent need not jibe perfectly with

expectation when a defendant may not know precisely how

much he or she will get away with before discovery, so the

amount on the fraudulently deposited checks may be used

by a district court in determining whether the government's

burden has been met in establishing a given intended loss

figure.

There remains the issue of why the face value of the

deposited checks may be used to make the prima facie case

that Geevers intended the full loss when even Geevers's

most harmful transaction considered for sentencing

purposes only caused eighty-five percent of the potential

loss. The answer to this question begins with the

admonition of Application Note 9 of S 2F1.1, which tells us

that loss need not be proven precisely. "The court need only

make a reasonable estimate of the loss, given the available

information." Therefore, because the face value of the

deposited checks is germane to analysis of intent, the

government's presentation of the face value as evidence

may make a prima facie case that the defendant intended

to cause the full loss of those amounts. Applying this figure

is not unfair to the defendant insofar as it represents a sum

that was entirely under his control when he elected to act

in contravention of the law. Once the government presented

this information to the District Court, therefore, we

conclude that the Court was free to accept the lossfigure

in the absence of persuasive evidence from Geevers that his

intent was to steal a lesser amount.

To be clear, the face value of the deposited checks is not

to be mechanically assumed to be the intended loss. We

merely hold that a sentencing court may consider that as

sufficient evidence that it was the intended loss. A

13

defendant may, of course, produce evidence of his or her

own in an attempt to convince the court that anotherfigure

was intended. It is easy to imagine circumstances where

this may be so. For example, if a man needed $10,000 for

surgery for his wife and sought to acquire the sum by

engaging in a check kite, he might make a worthless

deposit of $50,000 in order to inflate his "balance" to a high

enough level that the bank would honor a $10,000 check.

Such a defendant would likely be able to demonstrate that

his subjective intent was only to take $10,000.

It is certainly possible, therefore, for a defendant to

convince a sentencing court that he or she did not in fact

intend any actual loss. Geevers failed to make such

arguments here, beyond his claim that he could not have

expected to get it all and a statement by his attorney at

sentencing that "somewhere in his mind [Geevers] believed

he was going to catch up." App. 104. He also did not

present any evidence of what his actual intent was, which

he could have requested to do under Fed. R. Crim. P. 32(c).

As a result, the District Court was left with only Geevers's

assertions of what a "sensible check kiter could . . . have

reasonably expected." App. 88. Without having been

provided by the defendant with an alternative reasonable

basis on which to arrive at a more precise intended loss

figure, the District Court did not commit clear error in

making the guidelines calculation that it did.7

_________________________________________________________________

7. In his reply brief, Geevers argues that the District Court made a per

se rule that intended loss is the equivalent of potential loss. We do not

agree. We think it clear from the transcript of the hearing that the

District Court did not exclude the possibility that Geevers could have

intended a lesser loss; rather the Court concluded that Geevers had

failed to come forward with persuasive arguments that another figure

should be used. It stated that Geevers simply urged that only the actual

loss figure should have been used, but as the Court noted, actual loss

in the factual circumstances at hand is a function of how quickly the

victim of the fraud acts to stop the perpetrator. We do not view these

statements as announcing a per se rule. To be sure, the Court could also

have decided to charge Geevers simply with the withdrawals that he

attempted to make. However, in light of the likely prospect that Geevers

would have continued to return to withdraw additional sums at any

bank that failed to discover his fraud, see supra note 6, we conclude

that the District Court was not obligated to favor this figure.

14

3.

Allowing district courts to consider the face value of

checks as probative of intended loss avoids one negative

consequence of the reading urged by Geevers: the potential

equation, for culpability purposes, of disparate forms of

conduct. We think that a defendant who falsifies checks for

large sums of money is more culpable than one who does

so for lesser sums. Were we to adopt Geevers's position,

however, this distinction would be eroded. Adopting his

argument would equate the culpability of someone who

falsifies checks for large sums of money with that of one

who writes false checks for small amounts in situations

where there is no differential in the amount successfully

stolen. Given the creation of a risk to financial institutions

that attends the presentment of such checks, we view such

a result as a troubling one that should be avoided to the

extent possible and consistent with the legal framework

surrounding the guidelines.8

Our approach enjoys the added advantage of consistency

with the duty of sentencing courts to consider the goals of

affording adequate deterrence to criminal conduct, see 18

U.S.C. S 3553, because it provides incremental levels of

deterrence against criminals who may be considering

inflating the face values of the worthless checks that they

plan to deposit. If sentencing courts are allowed to sentence

based on the value of the falsely deposited check, check

kiters will learn that the more they write, the more they

risk, potentially reducing the face value of false deposits. As

it is generally true that the amount that a kiter is able to

steal will be a fraction of the amount deposited, deterring

large fraudulent deposits will serve to reduce the amount of

money ultimately lost to such frauds. As for the reverse

danger, overdeterrence, we do not think the potential of

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8. As for the reverse argument, that our approach draws no distinction

between the defendant who makes a false deposit and attempts to

withdraw the full amount with one who makes the same deposit, but

only attempts to take a fraction, a defendant in the latter situation who

can demonstrate to the sentencing court that his or her intended theft

was less than the full amount will indeed receive a lighter sentence. If

he

or she cannot make such a showing, then there is no difference in

culpability.

15

over-deterring the deposit of false checks is of particular

concern.

C. Impossibility

Geevers also argues that he cannot be ascribed with

intending to take money that would have been impossible

to take. The question whether it was truly impossible for

Geevers to abscond with the full face value of his

fraudulent deposits does not appear to have been litigated

at any length in the District Court. Assuming arguendo,

however, that these assertions are correct, we do not view

them as necessitating a different outcome. Rather, we join

the majority of courts of appeals in holding that

impossibility is not in and of itself a limit on the amount of

intended loss for purposes of calculating sentences under

the guidelines. The majority rule is that impossibility does

not require a sentencing court to lower its calculation of

intended loss. Compare, e.g., United States v. Klisser, 190

F.3d 34, 36 (2d Cir. 1999) (per curiam); United States v.

Blitz, 151 F.3d 1002, 1010 (9th Cir. 1998); United States v.

Studevent, 116 F.3d 1559, 1563 (D.C. Cir. 1997); United

States v. Wai-Keung, 115 F.3d 874, 877 (11th Cir. 1997),

with United States v. Galbraith, 20 F.3d 1054, 1059 (10th

Cir. 1994); United States v. Watkins, 994 F.2d 1192, 1196

(6th Cir. 1993).

As a matter of guidelines interpretation, we conclude that

the majority position is correct. Intent is intent.

Impossibility bears on what is reasonable for the person to

have intended to do, but the language in Application Note

8 of S 2F1.1 does not give any indication that

adventuresome or deluded criminals are to have their

actions interpreted differently than those of their more

sober counterparts. Nor does the attempt guideline,

S 2X1.1, make any provision for consideration of

impossibility.

Moreover, Application Note 11 of S 2F1.1 specifically

provides an escape valve for situations in which the

intended loss may "overstate the seriousness of the

offense." The note provides an example that specifically

contemplates a situation of impossibility. "[Overstatement]

16

may occur, for example, where a defendant attempted to

negotiate an instrument that was so obviously fraudulent

that no one would seriously consider honoring it." In light

of the specific contemplation of impossibility in the context

of departures, grafting an impossibility exception on to the

setting of the offense level is inconsistent with the language

and structure of the guidelines. Cf. United Steelworkers of

Am. v. North Star Steel Co., Inc., 5 F.3d 39, 43 (3d Cir.

1993) ("[A] statute's provisions should be read to be

consistent with one another, rather than the contrary.").9

We therefore conclude that the purported impossibility of

Geevers's absconding with the full amount of his worthless

deposits did not render erroneous the District Court's

factual conclusions about Geevers's intended loss.

III.

Finally, Geevers argues that if the District Court was

correct to consider the face value of his deposited checks in

calculating his intended loss, he should at least receive the

benefit of U.S.S.G. S 2X1.1(b)(1), which provides for a three-

level guideline reduction for attempts. Geevers maintains

that he qualifies for this reduction because he had not

drawn the full amount of money that he falsely deposited at

_________________________________________________________________

9. We also note that our interpretation of the guideline's text is

supported by the need to deal with culpability in a proportional manner.

"Limiting intended loss to that which was likely or possible . . . would

eliminate the distinction between a defendant whose only ambition was

to make some pocket change and one who plotted a million-dollar fraud."

United States v. Studevent, 116 F.3d 1559, 1563 (D.C. Cir. 1997).

In discussing Application Note 11 in a footnote in his reply brief,

Geevers argues that his trial counsel should have moved for a departure

on the grounds that the sentencing court's lossfigure overstated the

seriousness of the offense. He claims that this was ineffective assistance

of counsel that is established by a sufficient record on appeal so that it

may be considered on direct appeal rather than on collateral review. See

United States v. Cocivera, 104 F.3d 566, 570-71 (3d Cir. 1996). A reply

brief is generally too late to raise an issue under our jurisprudence. See

Hoxworth v. Blinder, Robinson & Co., Inc., 903 F.2d 186, 204-05 n. 29

(3d Cir. 1990). Therefore any such claim will have to be raised under 28

U.S.C. S 2255.

17

the time of his arrest. The District Court based its denial of

this argument on both the guideline's applicability and its

terms:

For the record, I do not believe that it applies, but

assuming for the sake of argument that 2X1.1 applies

to any degree, given the factual circumstances here,

then I do find as a matter of fact, that the 3-point

downward adjustment is not available because it was

the intervention of a third party, either apprehension

by the bank or law enforcement, that prevented . . . the

full flowering of the acts of the offense from occurring.

App. 64.

A.

It is not clear from the record whether Geevers should be

viewed as having pleaded guilty solely to a completed crime

or an attempt. Section 2X1.1(b)(1) provides for the

reduction for an attempt "unless the defendant completed

all the acts the defendant believed necessary for successful

completion of the substantive offense or the circumstances

demonstrate that the defendant was about to complete all

such acts but for apprehension or interruption by some

similar event beyond defendant's control." Application Note

2 explains that " `[s]ubstantive offense,' as used in this

guideline, means the offense that the defendant was

convicted of soliciting, attempting, or conspiring to

commit." The government contends that Geevers was not

convicted of an attempt, but rather the substantive crime of

bank fraud set forth in 18 U.S.C. S 1344, but this does not

dispose of the issue. The statute incorporates both the

completed act and the attempt. See 18 U.S.C.S 1344

("Whoever knowingly executes, or attempts to execute, a

scheme or artifice . . . .") (emphasis added). Indeed, the

District Court did not clearly state whether it thought that

the offense pleaded to resolved the issue. See App. 57 ("18

U.S.C. Section 1344 contains both the completed

substantive offense and the attempt. So the offense statute

does not really tell us one way or the other whether we go

to 2X."). The Court further acknowledged that Geevers's

crime "theoretically, [ ] could be viewed as a series of

attempts to some degree." App. 63.

18

Moreover, Application Note 10 of S 2F1.1 directs the

sentencing court to S 2X1.1.

In the case of a partially completed offense (e.g., an

offense involving a completed fraud that is part of a

larger, attempted fraud), the offense level is to be

determined in accordance with the provisions of

S 2X1.1 . . . whether the conviction level is for the

substantive offense, the inchoate offense . . . or both;

see Application Note 4 in the Commentary toS 2X.1.

We therefore conclude that S 2X1.1 may apply to Geevers.

We turn then to consideration of whether a defendant in

Geevers's shoes fits under the language of the guideline.

B.

Section 2X1.1(b)(1) states that there is no reduction if

"the circumstances demonstrate that the defendant was

about to complete all such acts but for apprehension or

interruption by some similar event beyond defendant's

control." Geevers argues that with respect to the offense to

which he pleaded guilty, the depositing of the worthless

$75,000 check at Bankers Savings, he had never attempted

to draw funds and had even returned the checks that had

been issued him. This argument for applying S 2X1.1(b)(1)

fails based on the facts as represented by Geevers. By

Geevers's own admission, Bankers Savings closed his

account after Merrill Lynch, which had hosted the closed

account on which Geevers attempted to draw, notified

Bankers Savings that the check was not backed by

sufficient funds. This intervention by a third party

prevented Geevers from even attempting to draw on his

worthless check.

There was no legal error in the District Court's

consideration of this fact, nor clear error in the factual

finding that followed: that Geevers would have completed

his intended fraud but for the intervention of a third party.

See United States v. Strozier, 981 F.2d 281, 286 (7th Cir.

1992) (applying similar analysis). Even more damaging to

Geevers's argument is the District Court's explicitfinding

during the colloquy that Banker's Savings closed Geevers's

account upon the warning of Merrill Lynch that Geevers's

19

deposit was not backed by adequate funds, thereby placing

Geevers's conduct squarely within the limiting language of

S 2X1.1(b) for attempts interrupted by events beyond the

defendant's control.

Nor does the language of Application Note 4 aid Geevers.

It provides:

In certain cases, the participants may have completed

(or have been about to complete but for apprehension

or interruption) all of the acts necessary for the

successful completion of part, but not all, of the

intended offense. In such cases, the offense level for

the count . . . [is the greater of the offense level for the

completed offense minus three or the offense level for

the completed part of the offense]. For example, where

the intended offense was the theft of $800,000 but the

participants completed (or were about to complete) only

the acts necessary to steal $30,000, the offense level is

the offense level for the theft of $800,000 minus 3

levels, or the offense level for the theft of $30,000,

whichever is greater.

Because the District Court concluded that Geevers would

have taken the rest of the money but for the interruption by

law enforcement and the intervention of the victim banks,

this commentary is inapplicable.

We acknowledge that an extreme reading of this

application note could be taken to mean that failure to

complete the full range of acts necessary to complete the

fraud automatically demands the reduction,

notwithstanding the interference of third parties. Such a

reading would, however, clash directly with both the text of

the guideline, see S 2X1.1(b)(1), and another part of the

official commentary. The "background" note to S 2X1.1

further explains (with emphasis added):

In most prosecutions for conspiracies or attempts, the

substantive offense was substantially completed or was

interrupted or prevented on the verge of completion by

the intercession of law enforcement authorities or the

victim. In such cases, no reduction of the offense level

is warranted. Sometimes, however, the arrest occurs

well before the defendant or any co-conspirator has

20

completed the acts necessary for the substantive

offense. Under such circumstances, a reduction of 3

levels is provided . . . .

This note, in conjunction with the guideline's text, makes

clear that interruption, except in the early planning stages,

precludes the three-level reduction. On the facts before us,

it was not clear error for the District Court to have

concluded that the intervention by the banks was not"well

before" the completion of the necessary acts for the

substantive offense.10 See United States v. Torres, 209 F.3d

308, 312 (3d Cir. 2000).

For the foregoing reasons, the judgment of the District

Court will be affirmed.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

_________________________________________________________________

10. Because the intercession of other parties makes clear that Geevers is

ineligible for a reduction under S 2X1.1, we need not explore the

alternative grounds of denial that Geevers had completed all of the acts

necessary for the completion of the offense.

21