PHILADELPHIA – The U.S. Court of Appeals for the Third Circuit has denied an appeal from a secretary convicted of wire fraud one year ago, and who had been sentenced to nearly two years in prison and three subsequent years of supervised release.
Third Circuit Judges Thomas M. Hardiman, David J. Porter, and D. Michael Fisher rejected the appeal of Tammy Laird, in a memorandum opinion authored by Hardiman and issued on May 4.
From January 2009 through August 2017, while Laird was employed as the Secretary and Treasurer of Corsica Borough, she defrauded the Borough in excess of $345,000 by issuing checks from the its bank accounts to her father, her husband and herself, by extracting funds from the Borough’s bank accounts to pay personal expenses and credit card bills, and by making personal purchases on the Borough’s business account at Staples.
Laird concealed her illicit activities by providing the Corsica Borough Council and state auditors with falsified bank statements and other documents. The Borough, whose population is only 357, was so devastated financially that it doubled property taxes to recoup its losses.
After she was arrested and charged with 26 counts of wire fraud, Laird entered a guilty plea to all counts.
Before sentencing, U.S. District Court for the Western District of Pennsylvania Judge Nora Barry Fischer explained that despite Laird’s showing of remorse and post-conviction rehabilitation efforts, she had also perpetrated a multi-year fraud upon Corsica Borough, a small community with very limited operating funds, and as such, deserved a sentence of imprisonment commensurate with the significant financial harm caused and her abuse of trust as a public official.
As a result, Fischer sentenced Laird to 21 months in prison, three of years supervised release to follow, and for her to pay restitution to the Borough in the amount of $266,050.79.
Laird then appealed to the Third Circuit, on the grounds that the District Court erroneously calculated the amount she was to pay in restitution and for failing to hold an evidentiary hearing to determine the loss.
“The record shows that the Council ‘presumptively accepted’ Laird’s actions and advice as the basis for much of its decision-making such that she acted ‘substantially free from supervision.’ Laird was responsible for setting the monthly Council meeting agenda, preparing the financial reports presented at that meeting, and selecting correspondence to show the Council, all without any oversight. The Council used these documents to decide which bills to pay and which projects to approve. So Laird’s discretionary judgment about what financial information the Council needed to govern the Borough received ‘considerable deference,” Hardiman said.
“Similarly, the Council designated Laird as the point person for annual audits, which the Borough relied on to apply for state funding. There is no evidence that any other Council member reviewed her submissions or was present at the audit exit conference. Laird thus had an ‘authoritative status’ when managing audits as well. And apart from the Council President, Laird was the only one authorized during the relevant period to sign checks on the Borough’s bank account. We agree with Laird that mere access is not enough to justify application of this enhancement. But as the Borough Secretary/Treasurer, Laird had the power to make decisions substantially free from supervision. The District Court did not err when it applied the abuse-of-trust enhancement.”
Laird further contested the District Court’s calculation of her legitimate income from 2014 through 2017. Before sentencing, the U.S. government obtained Laird’s federal tax records from 2012 to 2017, which showed $30,827 in legitimate income from Laird’s employment with the Borough. The government subtracted that amount from $296,877.79, a loss amount agreed-upon between the parties, resulting in a total loss of $266,050.79.
However, Laird countered that the Court should use only her Borough income from 2012, which she reported as $19,904, and estimate her income for 2013-2017 as $8,000 per year based on Council budget projections and meeting minutes.
“But that request contradicted her tax returns, which reported $8,283 in 2013, $2,640 in 2014, and no income for 2015-2017. Using $8,000 for 2013-2017, Laird’s proposed offset amount totaled $59,904, bringing the total loss below $250,000. The District Court concluded that the Government showed a loss amount between $250,000 and $550,000, finding Laird’s evidence that she earned $8,000 from 2014 to 2017 not credible,” Hardiman said.
“Laird argues that her tax records were unreliable evidence of her legitimate income for two reasons. First, she failed to report to the IRS funds she fraudulently obtained from the Borough. Second, she reported no income for 2015-2017 even though she performed work for the Borough during that time. We reject the fallacy Laird proffers: Her failure to disclose the money she embezzled doesn’t compel the conclusion that she also hid her legitimate income. It would be the unusual fraudster who disclosed her ill-gotten gains to the Internal Revenue Service. And it would be similarly odd for an employee not to disclose her legitimate wages. As the Court pointed out, Laird offered no timesheets, paystubs, W-2s, or other documents showing the actual number of hours she worked or income she earned during the relevant period that would have cast doubt on her tax records.”
Hardiman added that as to Laird’s contention that the Court should have held an evidentiary hearing to determine the Borough’s amount of loss, the law does not require it – and finally, that Laird had the opportunity to present additional evidence of loss at sentencing, but did not do so.
The Third Circuit then affirmed the trial court’s ruling and sentence.
U.S. Court of Appeals for the Third Circuit case 22-1978
U.S. District Court for the Western District of Pennsylvania case 2:18-cr-00337-001
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com