                     United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                    ___________

                                    No. 08-2013
                                    ___________

United States of America,              *
                                       *
            Plaintiff – Appellee,      * Appeal from the United States
                                       * District Court for the
      v.                               * Northern District of Iowa.
                                       *
Linda Zech,                            * [PUBLISHED]
                                       *
            Defendant – Appellant.     *
                                  ___________

                              Submitted: December 10, 2008
                                 Filed: January 27, 2009
                                  ___________

Before COLLOTON, BRIGHT, and SHEPHERD, Circuit Judges.
                           ___________

PER CURIAM.

       Appellant Linda Zech received a 63-month sentence after pleading guilty to one
count of financial-institution fraud, 18 U.S.C. § 1344, and one count of money
laundering, 18 U.S.C. § 1956. In this appeal, Zech challenges her sentence, arguing
that the district court1 miscalculated her Guidelines range by (1) determining that her
conduct substantially jeopardized the safety and soundness of a financial institution
and (2) increasing her offense level as the result of impermissible double counting.
We have jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742, and we affirm.

      1
        The Honorable Mark W. Bennett, United States District Court for the Northern
District of Iowa.
                     FACTS AND PROCEDURAL HISTORY

       Zech was the sole full-time employee of Eaton Employees Credit Union in Clay
County, Iowa. Beginning in at least January 2003 and continuing through January
2007, Zech fraudulently issued herself checks and loans from the credit union’s
accounts. Zech ultimately stole $770,000 of the credit union’s $3,000,000 in total
assets.

       The credit union had a bond to protect against the fraud and theft of its
employees, and the bond issuer paid the credit union $671,110.33, leaving the credit
union short by $98,889.67. Zech did not dispute that the amount of loss was so large
that the credit union would have become insolvent but for the bond. As a result of
Zech’s conduct, the credit union was forced to, among other things, reduce its
quarterly dividend payment from 4.5% to 1%.

       In November 2007, the government charged Zech with one count of financial-
institution fraud, 18 U.S.C. § 1344, and one count of money laundering, 18 U.S.C. §
1956. In December 2007, Zech pleaded guilty to both counts.

       At Zech’s April 2008 sentencing, the district court, adopting the
recommendation of the presentence-investigation report, enhanced her offense level
by 14 levels based on the amount of loss and by another four levels on the basis that
Zech’s conduct substantially jeopardized the safety and soundness of a financial
institution. The district court sentenced Zech to 63 months’ imprisonment and ordered
her to pay $770,000 in restitution to the credit union and the bond issuer that paid on
the bond. This appeal follows.




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                                    DISCUSSION

       We review the imposition of a particular sentence for an abuse of discretion.
See Gall v. United States, 552 U.S. ----, 128 S. Ct. 586, 591 (2007). In so doing, we
may review a defendant’s sentence for “both the procedural soundness of the district
court’s decision and the substantive reasonableness of the sentence imposed.” United
States v. Merrival, 521 F.3d 889, 890 (8th Cir. 2008). A district court commits
procedural error by failing to calculate (or improperly calculating) the Guidelines
range, treating the Guidelines as mandatory, failing to consider the 18 U.S.C. §
3553(a) factors, selecting a sentence based on clearly erroneous facts, or failing to
adequately explain the chosen sentence. See Gall, 128 S. Ct. at 597. We review the
district court’s findings of fact for clear error. United States v. Hunt, 171 F.3d 1192,
1195-96 (8th Cir. 1999). We review the district court’s interpretation of the
Sentencing Guidelines and their application to the facts de novo. See United States
v. Searcy, 233 F.3d 1096, 1099 (8th Cir. 2000).

I.    The district court did not commit procedural error by increasing Zech’s offense
      level by four levels because her conduct substantially jeopardized the safety and
      soundness of a financial institution, U.S.S.G. § 2B1.1(b)(13)(B)(i) (2007).

       Zech argues first that the district court erred by “incorrectly appl[ying] the
guidelines in imposing the four-level enhancement for substantially jeopardizing the
safety and soundness of a financial institution.” In concluding that the enhancement
applied, the district court relied on two circumstances described in section 2B1.1’s
commentary, the insolvency of the financial institution and the financial institution’s
substantial reduction in benefits to “pensioners or insureds.”

      The Sentencing Guidelines provide that a defendant’s offense level shall be
increased by four levels if the offense “substantially jeopardized the safety and
soundness of a financial institution.” U.S.S.G. § 2B1.1(b)(13)(B)(i). In resolving this
question, the commentary directs a district court to consider the following list of non-

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exhaustive factors: (1) the financial institution became insolvent; (2) the financial
institution substantially reduced benefits to pensioners or insureds; (3) the financial
institution was “unable on demand to refund fully any deposit, payment, or
investment”; and (4) the financial institution was “so depleted of its assets as to be
forced to merge with another institution in order to continue active operations.”
U.S.S.G. § 2B1.1 cmt. n.12(A)(i)-(iv).

       On appeal, Zech takes aim at both of the district court’s justifications for the
enhancement, arguing that (1) her sentence could not be enhanced for putting the
credit union in substantial jeopardy because it had a bond, which covered most of the
loss, and the credit union did not actually become insolvent and (2) a member of a
credit union is, as a matter of law, insufficiently analogous to the pensioners or
insureds described in the commentary to justify application of the substantial-jeopardy
enhancement.

        Turning to the first of those arguments, we conclude that the district court here
did not erroneously apply the substantial-jeopardy enhancement to Zech’s criminal
conduct. First, the fact that the credit union managed to avoid insolvency does not
preclude application of the enhancement because actual insolvency (or any other
circumstance listed in application note 12) is not a prerequisite for the substantial-
jeopardy enhancement. By the commentary’s own terms, the list is “non-exhaustive”
and establishes only the requirement that the district court “shall consider” the factors
in (i) through (iv) in determining whether conduct rises to the level of substantially
jeopardizing the safety and soundness of a financial institution. See § 2B1.1 cmt.
n.12. The list does not define all of the circumstances in which the enhancement is
appropriate. Thus, Zech’s principal argument, that the credit union did not actually
become insolvent, does not establish that the district court erroneously applied the
substantial-jeopardy enhancement. Cf. United States v. Collins, 361 F.3d 343, 348
(7th Cir. 2004) (construing an earlier version of the provision at issue and noting that
the Sentencing Guidelines Commission intended an “expansive interpretation of what

                                          -4-
it means to substantially jeopardize the safety and soundness of a financial
institution”).

       Moreover, the record shows that the district court did not err. But for the bond,
and the insurer’s willingness to pay on the bond, it is undisputed that the credit union
would have become insolvent. Zech’s conduct put the credit union in a harrowing
position and required the credit union to go to extraordinary efforts to ensure its
financial viability by attempting to collect on the bond. Cf. United States v. Young,
413 F.3d 727, 733 (8th Cir. 2005) (affirming application of the substantial-jeopardy
enhancement when defendant’s fraud caused a bank to become “critically
undercapitalized” and required “extraordinary efforts” from the bank president to
survive as a going concern); United States v. Brierton, 165 F.3d 1133, 1136 (7th Cir.
1999) (affirming application of a similar enhancement when the district court found
that but for the defendant’s resignation and the installation of a new president, “the
credit union faced a real danger of closing or going into receivership” (internal marks
omitted)).

       The district court’s application of the enhancement is also supported by
evidence that, although the bond ultimately saved the credit union from insolvency,
the credit union was in substantial jeopardy before the bond paid for Zech’s conduct.
During this time period, the financial soundness of the credit union hinged
precariously on the coverage decision of a third party—the bond issuer. We refuse
to read the relevant Guidelines provision as turning on the whim of a third party.
Stated differently, the fact that a mechanism exists to potentially reimburse the
financial institution in the event of loss does not necessarily preclude the applicability
of the enhancement. Cf. United States v. Jackson, 524 F.3d 532, 548 (4th Cir. 2008)
(rejecting the argument that, because a defendant reimbursed the defrauded retirement
plans, the plans had not been jeopardized). Thus, the district court was within its
discretion to determine that the conduct substantially jeopardized the safety and



                                           -5-
soundness of the credit union and did not, therefore, commit procedural error in
calculating Zech’s Guidelines range.2

II.   The district court did not commit procedural error by relying on both the
      Guidelines provision relating to offense-level increases for amount of loss,
      U.S.S.G § 2B1.1(b)(1), and the Guidelines provision relating to conduct that
      substantially jeopardizes the safety and soundness of a financial institution,
      U.S.S.G. § 2B1.1(b)(13)(B)(i).

      Zech contends next that the district court committed procedural error by
increasing her offense level for both the amount of the loss and substantially
jeopardizing a financial institution, arguing that this “constituted impermissible double
counting under the facts of this case.” We disagree.

        “Double counting occurs when ‘one part of the Guidelines is applied to
increase a defendant’s punishment on account of a kind of harm that has already been
fully accounted for by application of another part of the Guidelines.’” United States
v. Pena, 339 F.3d 715, 719 (8th Cir. 2003) (quoting United States v. Hipenbecker, 115
F.3d 581, 583 (8th Cir. 1997)) (internal quotation marks omitted). But a district court
does not double count for purposes of the Guidelines by enhancing an offense level
for two or more reasons when those reasons “address conceptually separate sentencing
notions.” United States v. Phillips, 506 F.3d 685, 688 (8th Cir. 2007).

       We conclude that the district court did not err. The conduct described in
U.S.S.G § 2B1.1(b)(1) relates to the amount of loss. The conduct described in
U.S.S.G. § 2B1.1(b)(13)(B)(i) relates to whether the conduct substantially jeopardized
the safety and soundness of a financial institution. Because these provisions address


      2
      In light of our holding, we need not consider whether the reduction of dividend
payments to the credit-union members supports the district court’s application of the
enhancement.

                                          -6-
conceptually separate sentencing notions, the district court did not commit procedural
error by relying on both to increase Zech’s offense level.

                                  CONCLUSION

      For the foregoing reasons, we affirm.
                      ______________________________




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