                         UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


UNITED STATES OF AMERICA,              
                 Plaintiff-Appellee,
                 v.                             No. 00-4566
STANLEY BALDWIN,
             Defendant-Appellant.
                                       
            Appeal from the United States District Court
     for the Eastern District of North Carolina, at Wilmington.
                James C. Fox, Senior District Judge.
                            (CR-99-52-F)

                       Argued: April 6, 2001

                      Decided: July 18, 2001

       Before LUTTIG and GREGORY, Circuit Judges, and
       Rebecca Beach SMITH, United States District Judge
               for the Eastern District of Virginia,
                      sitting by designation.



Affirmed by unpublished opinion. Judge Smith wrote the opinion, in
which Judge Luttig and Judge Gregory joined.


                            COUNSEL

ARGUED: Stephen Clayton Gordon, Assistant Federal Public
Defender, Raleigh, North Carolina, for Appellant. J. Gaston B. Wil-
liams, Assistant United States Attorney, Raleigh, North Carolina, for
Appellee. ON BRIEF: Thomas P. McNamara, Federal Public
2                     UNITED STATES v. BALDWIN
Defender, Raleigh, North Carolina, for Appellant. Janice McKenzie
Cole, United States Attorney, Anne M. Hayes, Assistant United States
Attorney, Raleigh, North Carolina, for Appellee.



Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).


                              OPINION

SMITH, District Judge:

   Stanley Baldwin ("the Defendant") appeals the sentence he
received following his guilty plea to bank fraud. See 18 U.S.C.A.
§ 1344 (West 2000). He contends that the district court erred in
departing upward from the applicable guideline range, based on the
finding that the Defendant’s fraud resulted in damage to the credit
reputations of his fraud victims. See U.S. Sentencing Guidelines Man-
ual § 2F1.1 (1998). Because we conclude that the district court acted
within its discretion, we affirm.

                                   I.

   The Defendant was charged with bank fraud stemming out of a
scheme that ran from March, 1996, until January, 1998. The fraudu-
lent scheme began when the Defendant received, by mail, a pre-
approved credit application in the name of Stanley Britt Baldwin
("Britt Baldwin"), who is unrelated to the Defendant. The Defendant
took the credit application to a branch of the United Carolina Bank
("UCB"),1 and a bank employee inadvertently gave him Britt Bal-
dwin’s social security number. Thereafter, the Defendant used Britt
Baldwin’s social security number to obtain credit and financing and
to access Britt Baldwin’s bank accounts.2 The Defendant also used the
    1
   UCB has since become Branch Banking & Trust Company.
    2
   The Defendant used Britt Baldwin’s social security number to finance
the purchase of a guitar in the amount of $1,568.08; to obtain a car loan
                       UNITED STATES v. BALDWIN                         3
social security number of his eleven-year-old son, Stanley Baldwin,
Jr. ("young Baldwin"), to obtain financing.3

   Sometime in 1996, Britt Baldwin noticed that two checks, which
he did not write, had been cashed on his account at UCB. When he
challenged the checks, the bank credited his account, and he gave the
matter no more thought. Britt Baldwin became concerned when the
outstanding balance on his credit report went above $124,000.00. In
a sworn affidavit, Britt Baldwin denied responsibility for twenty-four
credit entries on his credit reports. Britt Baldwin secured the services
of an attorney to restore his damaged credit. However, Britt Baldwin
later told investigators that he incurred no direct monetary loss as a
result of the Defendant’s activities, except travel to and from his attor-
ney’s office. Moreover, the attorney did not charge Britt Baldwin a
fee for the services rendered to restore Britt Baldwin’s credit.

  On July 20, 1999, a grand jury indicted the Defendant on seven

in the amount of $20,030.71; and to obtain personal loans in the amounts
of $3,800.00 and $3,499.93. The vehicle was repossessed after the
Defendant failed to make any payments. The Defendant made only one
payment of $80.00 on one of the personal loans, and both personal loans
were written off by the lending institutions as bad debt.
   The Defendant, jointly with his girlfriend, purchased a mobile home
by making a cash down payment and using Britt Baldwin’s social secur-
ity number to finance the remaining balance of $78,750.00. The Defen-
dant made payments only sporadically, and admitted to using
fraudulently obtained funds to make at least one payment. The mobile
home was repossessed and sold at a loss. The Defendant purchased a
truck by using a check written on a closed account, in the amount of
$3,485.00, as a down payment and financing the remainder by using Britt
Baldwin’s social security number. The truck was subsequently repos-
sessed for failure to make payments.
   The Defendant obtained counter checks in the amounts of $450.00 and
$200.00, written on Britt Baldwin’s checking account. He also obtained
a counter check for $3,700.00, by representing himself as Britt Baldwin.
   3
     The Defendant used his son’s social security number to obtain a car
loan in the amount of $22,274.50, and a personal loan in the amount of
$1,754.00. The vehicle was repossessed, due to the Defendant’s failure
to make payments, and sold at a loss.
4                        UNITED STATES v. BALDWIN
counts of bank fraud. On April 17, 2000, the Defendant pled guilty,
pursuant to a written plea agreement, to one count of bank fraud, in
violation of 18 U.S.C. § 1344.

   Although the presentence investigation report (the "PSR")4 indi-
cated no grounds for departure, the district court gave notice prior to
sentencing that it was considering an upward departure "based on
harm caused to the victims whose identities the Defendant misappro-
priated." J.A. 42. At the sentencing hearing, the court called Joseph
Casper, an agent with the United States Secret Service, to testify
about the offense conduct. The court engaged in the following collo-
quy with Casper:

        THE COURT: What was the effect upon this Stanley Britt
        Baldwin? Did he suffer credit—

        THE WITNESS: Mr. Stanley Britt Baldwin suffered a lot of
        trouble. As a matter of fact, when we finally got in touch
        with Mr. Britt Baldwin he had already obtained the services
        of an attorney to assist him in trying to get him out of the
        quagmire of the credit problem that he was in.

        THE COURT: It impaired his credit reputation, would that
        be fair to say?

        THE WITNESS: Yes, Your Honor, to say the least.

        THE COURT: And his reputation for integrity, I would pre-
        sume, as well?

        THE WITNESS: His reputation in the community. He was
        having difficulty cashing checks and other things like that.

    4
   The PSR provided for a base offense level of six; an increase of seven
levels based on the specific offense characteristic of loss exceeding
$120,000 but less than $200,000; an additional increase of two levels for
more than minimal planning; and a decrease of two levels for acceptance
of responsibility, for a total offense level of thirteen. See U.S.S.G.
§§ 2F1.1(a), (b)(1)(H), (b)(2)(A), 3E1.1(a). The PSR placed the Defen-
dant in Criminal History Category III.
                       UNITED STATES v. BALDWIN                       5
      THE COURT: What was the effect—what was it about the
      son? He took his son’s social security as well?
      THE WITNESS: Your Honor, he also obtained a—
      purchased a motor vehicle in his—I believe his 10 or 11
      year old son’s social security number—Mr. Baldwin’s social
      security number. This Mr. Baldwin’s son’s social security
      number.
      ....
      THE COURT: And, of course, the effect on his son’s credit
      won’t be determined for a number of years, I would assume.
      THE WITNESS: That’s correct, Your Honor.
Id. at 46-47.
  After reducing the total offense level by one in response to a
defense objection to the PSR,5 the court stated that it would depart
upward by two levels. The court explained:
      Because [the Defendant] didn’t just defraud these institu-
      tions. He defrauded the identity or assumed the identity of
      other persons to their detriment and I think that’s more hei-
      nous than the financial loss. There’s an old adage, he who
      steals my wallet steals trash. He who steals my good name
      steals all. It’s the worst crime of all. You can get back the
      money, but you can’t get back your reputation.
Id. at 51. The court found that the Defendant’s case was atypical,
thereby warranting departure, because the guidelines did not account
for damage done to the reputations of individuals. See id. at 51-52, 54.
  The court concluded:
        United States Sentencing Guidelines Section 2F1.1 takes

  5
   The district court found that the loss was less than $120,000, and
reduced the total offense level from thirteen to twelve. With a Criminal
History Category of III, the resulting guideline range was 15 to 21
months.
6                     UNITED STATES v. BALDWIN
    into account the loss to financial institutions. However, it
    does not take into consideration the endangerment of the
    solvency or reputation of the victim Stanley Britt Baldwin.

       Likewise, it is conceivable that the Defendant’s son, age
    12, may not feel the impact of his damaged credit for years
    to come.

       And, consequently, the court finds that an upward depar-
    ture is appropriate based upon the provisions of 2F1.1 appli-
    cation note 11(f) and 5K2.0.

Id. at 56. Finding that "in cases in which the loss determined under
2F1.1(b)(1) does not fully capture the harmfulness or seriousness of
the conduct an upward departure may be warranted," the court
departed upward by two levels, one for each victim. Id. at 55-56. The
resulting total offense level of fourteen, together with Criminal His-
tory Category III, resulted in a guideline range of 21 to 27 months.
Accordingly, the Defendant was sentenced to 27 months imprison-
ment, to be followed by a five-year term of supervised release. The
court also ordered the Defendant to pay restitution in the amount of
$53,723.33. The Defendant now appeals, challenging his sentence on
the ground that the district court’s upward departure was unwarranted.

                                  II.

   We review an upward departure under a "‘unitary abuse-of-
discretion’" standard. United States v. Barber, 119 F.3d 276, 282 (4th
Cir. 1997) (en banc) (quoting Koon v. United States, 518 U.S. 81, 100
(1996)). Under this standard, we afford substantial deference to the
district court’s departure decision. See Koon, 518 U.S. at 98.

   Congress has mandated that a district court impose a sentence
within the range that results from the proper application of the guide-
lines "unless the court finds that there exists an aggravating or miti-
gating circumstance of a kind, or to a degree, not adequately taken
into consideration by the Sentencing Commission in formulating the
guidelines that should result in a sentence different from that
described." 18 U.S.C.A. § 3553(b) (West 2000). In order to ascertain
                       UNITED STATES v. BALDWIN                          7
whether a potential factor is an appropriate basis for departure, a sen-
tencing court must first determine whether that factor was forbidden,
encouraged, discouraged, or unmentioned as a basis for departure by
the U.S. Sentencing Commission. See Koon, 518 U.S. at 92-96; Bar-
ber, 119 F.3d at 279-82. The court determines the category into which
a given factor falls by reference to the guidelines, policy statements,
and commentary. See Koon, 518 U.S. at 92-93. How the district court
should proceed is determined by the category into which the factor
under consideration falls. See id. at 93-96; Barber, 119 F.3d at 280-
82.

   Departure on the basis of a forbidden factor is never permissible.
See Barber, 119 F.3d at 280. If the court determines that a factor is
encouraged but has not been taken into account by the applicable
guideline, the court may exercise its discretion and depart from the
guideline range. See id. at 280-81. On the other hand, if the court
determines that an encouraged factor has been taken into account
within the applicable guideline, the court may depart "only if it con-
cludes that the factor is present to such an exceptional or extraordi-
nary degree that it is outside the heartland of situations encompassed
within the applicable guideline." Id. at 281. Similarly, if a factor is
discouraged, a district court may depart "only if it finds that the factor
exists to such an uncommon degree that it is outside the heartland of
circumstances embraced by the relevant guideline." Id. Departure on
the basis of an unmentioned factor "is permissible only when [the
presence of the unmentioned factor] takes the case outside the heart-
land of situations addressed by the applicable guideline." Id.; see
Koon, 518 U.S. at 96 ("If a factor is unmentioned in the Guidelines,
the court must, after considering the structure and theory of both rele-
vant individual guidelines and the Guidelines taken as a whole, decide
whether it is sufficient to take the case out of the Guideline’s heart-
land." (internal quotation marks and citation omitted)).

   Here, the district court departed upward on the basis of damage to
the credit ratings of the Defendant’s victims.6 Although the district
  6
    In defending the departure, the United States assumes that the district
court departed on the basis of "the knowing endangerment of the sol-
vency of one or more victims." U.S.S.G. § 2F1.1, comment. (n.11(f)).
Although the court cited this application note, the specific articulated
basis for the court’s departure was the endangerment to the victims’ rep-
utations or credit ratings. See supra § I (quoting from sentencing hear-
ing).
8                      UNITED STATES v. BALDWIN
court cited application note 11, this note does not expressly identify
damage to a victim’s credit rating as a potential basis for departure.
See U.S.S.G. § 2F1.1, comment. (n.11) (providing that in a case
where the monetary loss "does not fully capture the harmfulness and
seriousness of the conduct, an upward departure may be warranted,"
and providing examples).7 Damage to credit rating was not listed by
the Commission as a factor that can never be a basis for departure,
nor has this factor’s appropriateness as a basis for departure been
expressly addressed in the guidelines, policy statements, or commen-
tary. Damage to a victim’s credit reputation is, therefore, an unmen-
tioned factor.8 See United States v. Fenner, 147 F.3d 360, 364 (4th
Cir. 1998).

   Because the factor is unmentioned, the departure was proper only
if it was not one that the Commission considered to lie within the
fraud guideline’s heartland. The Defendant cites two unpublished
decisions in support of his position that damage to a victim’s credit
reputation does not take a fraud case out of the heartland.9 See
United States v. All, No. 98-4205, 1998 U.S. App. LEXIS 22676 (4th
Cir. Sept. 16, 1998) (per curiam); United States v. O’Dette, No. 93-
1324, 1994 U.S. App. LEXIS 16184 (6th Cir. June 12, 1994) (per
curiam). The All case did not involve damage to a victim’s credit rat-
ing. See 1998 U.S. App. LEXIS 22676, at *4-*5. To the extent that
    7
     See supra note 6.
    8
     Section 2F1.1 was amended effective November 1, 2000, to provide
for a two-level increase in offense level if a defendant obtains a bank
loan using another individual’s social security number that was obtained
without authorization. See U.S.S.G. § 2F1.1(b)(5)(C)(i) (2000); id.
§ 2F1.1, comment. (n.16(A)). The amended guidelines suggest that an
upward departure might be appropriate if "the offense level does not ade-
quately address the seriousness of the offense," which may be the case,
for example, if the offense "caused substantial harm to the victim’s repu-
tation or credit record, or the victim suffered a substantial inconvenience
related to repairing the victim’s reputation or a damaged credit record."
U.S.S.G. § 2F1.1, comment. (n.16).
   9
     We reject the Defendant’s suggestion that the factor does not remove
this case from the heartland of fraud cases because "the crime of fraud—
like virtually all criminal conduct—inherently victimizes someone else."
Brief for Appellant at 13.
                      UNITED STATES v. BALDWIN                         9
United States v. O’Dette has precedential value, it supports upholding
the departure. In O’Dette, the Sixth Circuit observed that the fraud
guideline was directed at punishment for losses suffered by the bank,
not losses suffered by third parties; in particular, the court found that
the fraud guideline is not directed toward the adverse impact fraud
may have on a third party’s credit. See 1994 U.S. App. LEXIS 16184,
at *9. We do not find that the district court here abused its discretion
in determining that the Commission did not consider the adverse
impact that a defendant’s fraud may have on the credit reputations of
third parties under the guidelines in effect at the time of the Defen-
dant’s sentencing.10

   The Defendant also argues that the district court clearly erred in its
determination that there was damage to the victims’ credit reputa-
tions. The court relied on the PSR and the testimony of Agent Casper.
This evidence demonstrates that Britt Baldwin suffered at least a tem-
porary loss to his credit reputation and inconvenience to the point of
obtaining an attorney to have his credit reputation restored. Young
Baldwin experienced damage to his credit reputation, the effect of
which is currently indeterminate. The district court did not clearly err
in determining that the Defendant’s fraud damaged the credit reputa-
tions of his victims. Accordingly, we conclude that the court did not
abuse its discretion in basing an upward departure on this factor.

                                  III.

   In sum, we conclude that the district court did not abuse its discre-
tion in determining that damage to credit reputation is a factor that
takes a case outside the heartland of the fraud guideline, or in finding
that the Defendant’s fraudulent activity damaged the credit reputa-
tions of Britt Baldwin and young Baldwin. Accordingly, we affirm
the decision of the district court.

                                                            AFFIRMED

  10
   The subsequent amendment of § 2F1.1 supports this conclusion. See
supra note 8.
