Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-7-2004

USA v. Ruggiero
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-4331




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                                                              NOT PRECEDENTIAL

         UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


                                      NO. 03-4331


                           UNITED STATES OF AMERICA,

                                            v.

                             BARBARA ANN RUGGIERO

                                                       Barbara Ruggiero,
                                                                   Appellant


                     On Appeal from the United States District Court
                              for the District of New Jersey
                            (D.C. Criminal No. 03-cr-00397)
                        District Judge: Hon. Anne E. Thompson


                       Submitted Under Third Circuit LAR 34.1(a)
                                    May 26, 2004

       Before: SCIRICA, Chief Judge, RENDELL, and ALARCÓN* , Circuit Judges

                                  (Filed: June 7, 2004)


                               OPINION OF THE COURT

ALARCÓN, Circuit Judge.

        Barbara Ruggiero pleaded guilty to one count of conspiracy to commit mail fraud,



   *
      Hon. Arthur L. Alarcón, Senior Judge, United States Court of Appeals for the
Ninth Circuit, sitting by designation.
a violation of 18 U.S.C. § 371. At sentencing, the district court applied a two-point

offense level enhancement based on its determination that Mrs. Ruggiero was “an

organizer, leader, manager, or supervisor” in the criminal conspiracy to which she

pleaded guilty. United States Sentencing Guidelines (“USSG”) § 3B1.1(c). The district

court also applied a two-level sentencing enhancement pursuant to section 3B1.3 of the

Guidelines after finding that Mrs. Ruggiero abused a position of trust to “facilitate[] the

commission or concealment of the offense.” USSG § 3B.13.

       Mrs. Ruggiero contends that the district court’s findings were clearly erroneous.

We affirm because we conclude, after reviewing the record, that the district court did not

clearly err in finding that a two-level “organizer” enhancement was appropriate, and that

Mrs. Ruggiero abused a position of trust in order to facilitate and conceal her crimes.

                                              I

       On June 22, 1998, Mrs. Ruggiero was employed as a Claims Team Manager II by

the Liberty Mutual Insurance Company (“Liberty Mutual”). Her position gave her

supervisory authority over twenty employees and the authority to authorize the payment

of insurance claims up to $100,000. On that date, she was fired because her employer had

discovered that eighty-three claim checks were issued by her without any supporting

documentation.

       Liberty Mutual filed a civil action against Mrs. Ruggiero and ten other persons on

April 18, 2000 to recover the amounts it lost as a result of fraudulent claims.



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Mrs. Ruggiero allowed a default judgment to be entered against her. On August 2, 2002,

the court entered a judgment against Mrs. Ruggiero and four other defendants awarding

Liberty Mutual $5,962,785.36.

       The Government filed an Information against Mrs. Ruggiero on M ay 22, 2003, in

which she was charged with conspiracy to use the mails in the execution of a scheme to

commit fraud in violation of 18 U.S.C. § 1341. Prior to that date, the Government and

Mrs. Ruggiero’s counsel entered into a plea agreement in which she accepted

responsibility for engaging in the mail fraud scheme. The Information alleges that Mrs.

Ruggiero conspired with others to obtain money from Liberty Mutual by means of false

and fraudulent pretenses, representations, and promises by sending claim checks through

the mail to Mrs. Ruggiero’s family members and associates. The Information also alleges

that Mrs. Ruggiero received kickbacks of as much as 60 percent of the amount of the

fraudulent claim checks.

       On May 22, 2002, Mrs. Ruggiero appeared before District Judge Anne E.

Thompson. Mrs. Ruggiero waived prosecution by indictment and filed an application for

permission to enter a guilty plea. In response to the court’s questions, Mrs. Ruggiero

testified under oath that, as a claims manager, she had the power to issue claim checks up

to $100,000, but not to family members or relatives. She also admitted that she received

as much as 60 percent of the face value of the fraudulent claim checks in return for

issuing them to family friends and relatives. She further testified that she issued



                                              3
fraudulent checks to the twelve persons identified in the Information. The district court

accepted M rs. Ruggiero’s guilty plea after admonishing her of her constitutional rights

and the consequences of pleading guilty.

       On July 17, 2003, a United States probation officer filed a presentence

investigation report (“PSR”) with the court, and served copies on the parties. On July 30,

2003, Mrs. Ruggiero’s counsel objected to the probation officer’s recommendation that

she receive a two-point adjustment as an organizer, leader, or supervisor of the conspiracy

under U.S.S.G. § 3B1.1(c ) because “there is no concrete evidence as to how the checks

were issued nor who issued the checks.” Defense counsel also objected to the probation

officer’s recommendation that she abused a position of trust under § 3B1.3 because “the

record is devoid of sufficient proofs regarding Barbara Ruggiero’s role in this offense.”

       The district court rejected the defense’s objection to the PSR and found that Mrs.

Ruggiero was a leader of the conspiracy, and that she abused a position of trust. The

district court sentenced Mrs. Ruggiero to forty-months imprisonment and ordered her to

pay $1,704,336.41 in restitution to Liberty Mutual. Mrs. Ruggiero has timely appealed

the district court’s sentencing decision.

                                             II

       Mrs. Ruggiero contends that the district court clearly erred in applying a two-point

offense level increase based on its finding that she was an organizer, leader, manager, or

supervisor in the conspiracy to commit mail fraud and in enhancing her sentence because



                                             4
she violated a position of trust. Mrs. Ruggiero argues that the district court improperly

relied on information in the PSR that was obtained from “a review of government

documents, and telephone conversations with the case agent,” and the unsworn statements

of the United States Attorney. This court reviews a district court’s factual findings in its

sentencing decision for clear error. United States v. Mussayek, 

, 252 (3rd

Cir. 2003).

       The Sentencing Guidelines provide that, in resolving a dispute concerning a factor

important to a sentencing determination, “the court may consider relevant information

without regard to its admissibility under the rules of evidence applicable at trial, provided

that the information has sufficient indicia of reliability to support its probable accuracy.”

U.S.S.G. § 6A1.3; see also 18 U.S.C. § 3661 (“No limitation shall be placed on the

information concerning the background, character, and conduct of a person convicted of

an offense which a Court of the United States may receive and consider for the purpose of

imposing an appropriate sentence”). This court has held that hearsay can be used in

support of a sentencing decision so long as it has sufficient indicia of reliability to support

its probable accuracy. United States v. Brothers, 

, 848 (3rd Cir. 1996).

       In his report, the probation officer summarized facts stipulated to in the plea

agreement. In the plea agreement, Mrs. Ruggiero admitted that she was authorized to

issue checks for Liberty Mutual on valid claims for up to $100,000. She also accepted

responsibility for the crime of mail fraud.



                                              5
       During the plea proceedings before Judge Thompson, Mrs. Ruggiero admitted

under oath that she authorized checks sent to family members knowing that she was not

permitted to do so under company policy, and that such conduct was illegal. She also

acknowledged that she received kickbacks in return for issuing fraudulent checks. This

court has held that “facts relevant to sentencing contained in the indictment and plea

agreement are conclusively established by the entry of a guilty plea even if they are not

elements of the offense charged.” United States v. Deckler, 

, 823 n.7 (3rd

Cir. 1995).

       Mrs. Ruggiero’s admissions in the plea agreement, and her plea of guilty to the

allegations set forth in the Information conclusively demonstrate that she was an

organizer, leader, manager, and supervisor of the conduct of her cohorts, and that she

abused a position of trust.

       Mrs. Ruggiero also maintains that she did not occupy a position of trust because

Linda Frey, another employee, supervised her work. Pet’r Op. Brief at 28. She argues

that this court’s decision in United States v. Sokolow, 

(3d Cir. 1996) dictates

that a position of trust exists only where the employee has “sole control” and operates

“without oversight and supervision.” 

We disagree. The Guideline

commentary notes that a person in a position of trust may be “subject to significantly less

supervision” than other employees, but does not require that an employee be subject to no

supervision. USSG § 3B1.3, cmt. n.1 (emphasis added). It is obvious that Ms. Frey’s



                                             6
supervision was inadequate to preclude Mrs. Ruggiero from abusing her authority to issue

claim checks.

      Based on the foregoing analysis, we affirm the district court’s sentencing decision.




                                            7