United States v. Marles

Citations: 408 F. Supp. 2d 38; 2006 U.S. Dist. LEXIS 566; 2006 WL 47651Docket: CR-05-55-B-W

Court: District Court, D. Maine; January 6, 2006; Federal District Court

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Brian N. Marles, a former Senior Credit Analyst at MBNA, engaged in fraudulent activity by accessing his personal account and improperly increasing his line of credit to transfer balances from high-interest credit cards from other banks into his MBNA account at a lower interest rate. He pled guilty to committing fraud in violation of 18 U.S.C. § 1030. In the Pre-Sentence Investigation Report, the Probation Office recommended against a two-level enhancement under U.S.S.G. § 3B1.3 for abuse of a position of trust or use of special skills, which the Government contested. The court held hearings on this issue in late 2005. 

MBNA, a bank holding company based in Wilmington, Delaware, employs around 27,000 people and specializes in issuing credit cards, particularly affinity cards. The company operates in a competitive market where credit extensions are unsecured, relying heavily on the borrower's willingness and capacity to repay. Unlike traditional banking, credit analysts at MBNA make decisions based on individual assessments rather than solely on automated scoring systems, allowing for a more nuanced approach to lending.

MBNA grants its credit analysts significant discretion in credit decisions, employing two main processing methods: queue applications and personal phone calls. Queue applications allow for quicker processing, with analysts making 15-22 decisions per hour, while phone calls typically result in 12-15 decisions per hour due to their longer duration. Analysts spend 45 seconds to 1 minute on queue applications and 2 to 3 minutes per phone call to assess credit extension.

Brian N. Marles, a 38-year-old veteran and graduate of the University of Southern Maine, joined MBNA in 1996 and transitioned to the Credit Division in 1997 as a Credit Analyst II, receiving a loan authority of $5,500. This authority signifies an employee's judgment and competence, tracked by a lender code linked to approved loans. Marles advanced to Senior Credit Analyst by fall 1998, a role requiring internal promotion with specific qualifications, including customer contact experience and strong analytical skills, along with a preference for a four-year degree. Senior Credit Analysts undergo six weeks of intensive training on various critical topics.

Marles' loan authority increased with his promotions, peaking at $25,000 as a Senior Credit Analyst, Grade 220, by January 2005. MBNA employs about 1,000 credit analysts out of approximately 27,000 total employees, with 200-220 based in Belfast. As a Senior Credit Analyst, Marles was required to be proficient in computer systems and knowledgeable about MBNA's lending policies.

Mr. Marles, a Senior Credit Analyst at MBNA, was responsible for making numerous loan decisions during phone calls with applicants, requiring him to skillfully analyze various financial information, including credit reports and income data, to evaluate applicants' creditworthiness. He handled between 60 and 160 decisions daily and was expected to adhere to MBNA's marketing strategies during these interactions. Mr. Marles had significant discretion in approving credit, with his supervisor reviewing only about 10% of his decisions, allowing him to commit MBNA to lend millions, potentially up to $100 million annually. Once he approved a loan, customers could immediately withdraw the funds unsecured.

Despite this discretion, Mr. Marles operated under strict guidelines that required him to gather specific information to meet MBNA's criteria. His role involved intense scrutiny, as his performance was continuously evaluated based on efficiency and documentation. He was classified as a non-managerial, non-exempt employee (classification 220) and did not supervise other staff. His access to customer credit records was password-protected, but his activities were extensively tracked. Supervision included direct oversight and random reviews, with his supervisor periodically listening to calls and conducting side-by-side monitoring, as well as some calls being recorded for later analysis. 5% to 10% of his decisions faced random managerial reviews monthly.

The manager conducted a performance evaluation of Mr. Marles through 'product sampling,' comparing his performance against established criteria and peers. Key assessment criteria included decision quality, accuracy of customer information, decision-making efficiency, and successful balance transfers. Mr. Marles' work was subject to extensive scrutiny, including personal observations and computer-generated analyses. Notable entries from his personnel file indicated instances of unapproved Internet use during work hours, failure to assess balance transfer fees, and logging out during designated work times for personal reasons. Mr. Marles was also marked tardy and provided inconsistent information regarding credit line approvals during calls, attributing discrepancies to forgetfulness. His performance feedback emphasized that his quality of work was a choice, with warnings about potential removal from his position. Additionally, detailed quantitative data on his productivity, including time spent on calls and comparisons with colleagues, was maintained in his personnel file, showcasing MBNA’s capacity for comprehensive employee performance analysis.

Mr. Marles, a Senior Credit Analyst at MBNA, was evaluated based on various performance factors, including quality, accuracy, application management, communication, problem-solving, and time management. His performance ratings ranged between 3.29 and 3.02, and his accuracy was measured monthly on a scale of 100, enabling MBNA to track improvements or declines over time. MBNA's extensive monitoring practices, supported by employee privacy waivers, aimed to enhance productivity and customer satisfaction.

On January 13, 2005, Mr. Marles accessed his and his wife's credit card accounts using his work credentials, unlawfully increasing their credit limits by $28,700. He subsequently transferred $20,628 from other credit cards to these accounts. This unauthorized activity came to light during a routine audit on February 11, 2005, when MBNA identified the transactions linked to his user ID. Mr. Marles confessed during an interview on February 14, 2005, acknowledging that he acted without MBNA's approval to benefit from lower interest rates.

Additionally, evidence was presented regarding other MBNA employees involved in similar misconduct, with varying outcomes regarding sentencing enhancements. The court found no basis for enhancement in the case of Sharon Lee, an employee whose actions were deemed comparable to those of a bank teller, thus not warranting a higher penalty as per United States v. Lee, 324 F.Supp.2d 165 (D.Me.2004).

Jonathan Holland, a Senior Credit Analyst at MBNA, was described by Judge Sleet as holding a position of trust during sentencing, although an enhancement was not applied in his case. In contrast, Eric Price, a Credit Analyst below Mr. Marles, had his offense level increased by Chief Judge Singal due to the abuse of his position of trust, as evidenced by his submission of fabricated applications and involvement in 'account takeovers.' 

Todd Beacham, a former Department Manager at MBNA, provided comparative testimony on the roles of Senior Credit Analysts and Bank Loan Officers. He indicated that Senior Loan Officers can initially approve loans up to $50,000, eventually reaching $500,000, and have significant authority to commit the bank to loans, even against underwriting department advice. In contrast, Senior Credit Analysts, such as Mr. Marles, do not have final authority and can be required to retract offers, with Mr. Beacham noting that Mr. Marles had to do so occasionally.

Beacham emphasized that while both roles involve lending, the differing structures of bank and credit card lending lead to greater oversight of credit analysts. He noted that banks secure loans, reducing their risk, while credit card companies do not, exposing them to higher losses. 

The excerpt also discusses U.S.S.G. § 3B1.3, which allows for a two-level sentence enhancement if a defendant abused a position of trust or used a special skill that significantly facilitated the offense. The guidelines differentiate between roles, suggesting that a bank executive committing fraud may receive an enhancement, while a bank teller committing embezzlement may not. For the enhancement to apply, the position of trust must have significantly aided in the commission or concealment of the crime. Special skill is defined as requiring unique education or training, with examples including professions such as law and medicine.

Mr. Marles did not occupy a position of trust at MBNA that would justify a sentencing enhancement under U.S.S.G. 3B1.3. The First Circuit established a two-step inquiry for determining a position of trust: first, whether the defendant held such a position, and second, whether it was used to facilitate or conceal the offense. A position of trust is characterized by substantial professional or managerial discretion, typically involving less supervision than non-discretionary roles. Despite Mr. Marles' title and loan authority, his discretion was severely limited by MBNA's policies, which included close monitoring of his work, periodic reviews of his decisions, and management's ability to override his loan approvals. His work environment was heavily scrutinized, as evidenced by ongoing monitoring of his calls and actions, including documentation of minor infractions. Additionally, he was not classified as a professional or managerial employee at the time of the offense and had faced significant managerial oversight, including write-ups and warnings about his performance. The essence of a position of trust is the confidence that an employer places in an employee not to exploit that trust, which, in Mr. Marles' case, was not present. Therefore, while fraud often involves a breach of trust, not every instance qualifies for enhanced sentencing under 3B1.3, and the determination must consider the perspective of the victim regarding the nature of trust in the employment relationship.

In the case of United States v. Bollin, it is established that a mere breach of trust does not qualify for a 3B1.3 enhancement unless the employee is granted significant authority to exercise professional or managerial discretion by the employer. For instance, while banks expect honesty from all employees, tellers do not meet the criteria for enhancement under this guideline. The applicability of the enhancement is highly fact-dependent, as illustrated in various cases. For example, in United States v. Lee, although the defendant embezzled while employed at MBNA like Mr. Marles, she held an entry-level position without authority to extend credit, which impacted the decision not to impose the enhancement. 

The government cited cases such as United States v. Fox, where a credit card employee was upheld for enhancement after being promoted to a managerial role. In contrast, United States v. Magnuson involved a computer analyst who misused special access to his employer's systems, leading to a finding of abuse of trust due to broad access not available to all employees. However, Magnuson has limited relevance here, and distinctions between bank loan officers and credit analysts further complicate the application of the enhancement. The court found that MBNA's oversight of Mr. Marles did not demonstrate an abuse of trust under U.S.S.G. 3B1.3, as the employer's trust was limited and closely monitored. Therefore, the government failed to prove that Mr. Marles abused a position of trust warranting the enhancement.

The use of a special skill enhancement under U.S.S.G. 3B1.3 applies to expertise not typically held by the general public, often requiring significant education or training. Examples include professions such as pilots, lawyers, and doctors. Notably, formal education is not a prerequisite for possessing a special skill, as demonstrated by cases involving self-taught individuals like computer hackers or tax preparers. The First Circuit's standard for determining a special skill focuses on whether the defendant's abilities exceed those of the general public, rather than strictly requiring formal qualifications.

However, the applicability of this enhancement is limited, as seen in the treatment of bank tellers who are explicitly excluded from enhancements for a position of trust. If the standard for special skill enhancement were solely based on technical access to bank systems, it could lead to a broad application affecting many employees, which would not be consistent with the intent of the Guidelines. The commentary emphasizes that the enhancement should be reserved for individuals whose skills are significantly advanced beyond the general populace.

The assessment of whether Mr. Marles applied his specific skills in committing the crime is essential; possessing a special skill alone does not justify an enhancement. The courts have reinforced that the enhancement is warranted only if the defendant's skills were actively utilized in the offense, as evidenced in cases like Weinstock and Noah.

In United States v. Garfinkel, the court determined that the defendant, Mr. Marles, a Senior Credit Analyst, did not utilize special skills in committing his offense, rendering the U.S.S.G. 3B1.3 enhancement inapplicable. Despite his job title, there was insufficient evidence that his seniority influenced the crime. Mr. Marles accessed his and his wife's MBNA accounts using a User ID assigned to all employees, suggesting that mere access did not demonstrate the application of a special skill. Although he had the authority to alter credit limits due to his position, he could have committed the crime using the same capabilities before his promotion, thereby making his senior role irrelevant to the enhancement. The court noted that while he had training in assessing credit risks, he did not employ this expertise in his fraudulent actions. Instead, he relied on basic skills, such as using a computer password and making mechanical changes, which contributed to his quick apprehension. Ultimately, the court concluded that the government failed to prove that Mr. Marles abused a position of trust or used a special skill as defined by sentencing guidelines.

The court declined to impose a two-level enhancement under U.S.S.G. § 3B1.3 for the defendant Mr. Marles' offense level. His supervisor noted Mr. Marles had a history of careless remarks and required close supervision, leading to his placement outside the supervisor's office for monitoring. Despite this, there was no evidence that Mr. Marles attempted to conceal his actions; he did not misuse access codes or erase computer entries, indicating he might have believed MBNA would overlook his actions. The document references the Reccko case, which suggests that employer monitoring of employee calls can imply a lack of trustworthiness, but recent amendments to the commentary on § 3B1.3 focus on professional discretion rather than merely the opportunity to commit a crime.

The document highlights the context of Mr. Marles' lending authority—$5,500, which was more of a guideline than a strict limit, allowing for potential approvals of higher credit amounts based on applicant qualifications. Mr. Marles exceeded this limit by $25,700, but MBNA's detection was due to his unauthorized alterations of his own account rather than the lending itself. His personnel file indicated a significant increase in his and his wife's credit line, which raised flags in internal audits. There was no evidence that Mr. Marles exploited his position as a Senior Credit Analyst in committing the offense; rather, he claimed he altered credit limits to secure better interest rates, admitting he thought he could evade detection. The process for making such alterations was quick, suggesting that it was neither complicated nor time-consuming.