Bank Fraud—Sentencing Enhancement

In 2003, Steven Lawrence Morehouse pleaded guilty to bank fraud in Maine.^[1] Three years later, he has been sentenced.^[2] The New Hampshire man was accused of making a “career of manipulation” by “bilking more than $350,000 in check-kiting schemes from banks up and down the East Coast, including some in Maine.”^[3]

Mr. Morehouse operated in small towns, obtaining voice-mail boxes “using a fictitious name, then plac[ing] a classified advertisement listing job opportunities for fictitious business.”^[4] When applicants called in, they would provide Mr. Morehouse with personal information such as driver’s license numbers, Social Security numbers, and dates of birth.^[5] Those identities were then used to open business checking accounts; he was caught after a visit to the Bar Harbor Banking and Trust in Ellsworth, Maine, where a teller “recognized him from a fraud perpetrated against the bank 10 years earlier.”^[6] He was arrested when he checked his mail at a post office box.^[7]

Mr. Morehouse was originally indicted on seven counts of making false statements, misusing a false social security number, and identity theft, but those charges were withdrawn^[8] and replaced by one count of bank fraud, to which Mr. Morehouse pleaded guilty.^[9] He then disappeared and failed to show up for his sentencing in November 2004.^[10] He was finally tracked down in New Hampshire last November, living under an assumed identity: Morris Simons.^[11] As a result, he was sentenced to ten years in prison instead of the recommended 63-78 months, notwithstanding Mr. Morehouse’s claims that his crimes were committed to pay for his schizophrenic wife’s medication.^[12] He was also ordered to pay $364,206 in restitution.^[13]

The Government submitted a sentencing memorandum which maintained that two individuals were arrested and jailed for the crimes to which Mr. Morehouse eventually pleaded guilty.^[14] Furthermore, after disappearing, Mr. Morehouse allegedly committed more crimes under assumed identities.^[15]

Mr. Morehouse’s enhanced sentence is an example of how Booker has sometimes worked against defendants by making the Sentencing Guidelines advisory rather than mandatory. If Mr. Morehouse appeals his sentence, the First Circuit Court of Appeals will review an upward departure for reasonableness, using an abuse of discretion standard.^[16]

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[1] ”Pathological” Criminal Faces Strict Sentence, Bangor Daily News, Feb. 15, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] See United States v. Morehouse, No. 1:03-cr-00015 (D. Me. 2003) (available via ECF).
[9] See United States v. Morehouse, No. 1:03-cr-00088 (D. Me. 2003) (available via ECF).
[10] BDN, supra note 1.
[11] Id.
[12] Id.
[13] Id.
[14] See Government’s Second Sentencing Memorandum 1, United States v. Morehouse, No. 1:03-cr-00088 (D. Me. 2003) (available via ECF).
[15] Id. at 2-3.
[16] See United States v. Bailey, No. 04-31138 at *21 (5th Cir. 2006); United States v. Sitting Bear, No. 05-2367 at *15 (8th Cir. 2006); cf. United States v. Phillips, No. 04-6371 (10th Cir. 2006); United States v. McCaffrey, No. 03-2189 (7th Cir. 2006)