§431 Cases Finding Aggravating Role
6th Circuit finds defendants were organizers of criminal activity involving five or more. (431) Defendants ran a fraudulent scheme that purported to sell cars they did not have, stole credit card information, and used others’ computers to speculate in cryptocurrency. At sentencing, the district court added four levels under § 3B1.1 for being organizers or leaders of criminal activity involving five or more people or was otherwise extensive. In an amended opinion, the Sixth Circuit upheld the enhancements, finding that one defendant was the mastermind of the entire scheme and that the other posted the majority of the internet postings and obtained the money. U.S. v. Nicolescu, __ F.4th __ (6th Cir. Oct. 5, 2021) No. 19-4247 (superseding 15 F.4th 689).
7th Circuit holds formal group is not required for leadership role increase. (431) Defendant was convicted of carjacking and other offenses. At sentencing, the court found that defendant was the organizer or leader of criminal activity involving fewer than five participants, and therefore added two levels under § 3B1.1(c). The Seventh Circuit affirmed, holding that defendant need not be the leader of a formal organization and that defendant’s leadership of an informal group was sufficient. U.S. v. Lovies, __ F.4th __ (7th Cir. Oct. 21, 2021) No. 20-2463.
11th Circuit finds role in training others was sufficient for managerial increase. (431) At defendant’s sentencing for wire fraud for running a telemarketing operation, the court added three levels under § 3B1.1(b) for acting as a manager or supervisor of criminal conduct. The Eleventh Circuit affirmed, noting that defendant trained salespeople and was the only person who had an office in a branch of the telemarketing operation. U.S. v. Wheeler, __ F.4th __ (11th Cir. Oct. 21, 2021) No. 17-15003.
6th Circuit finds defendants were leaders and organizers of fraud scheme. (431) Defendants ran a fraudulent scheme that purported to sell cars they did not have, stole credit card information, and used others’ computers to speculate in cryptocurrency. At sentencing, the court added four offense levels under § 3B1.1 because both defendants were organizers or leaders of criminal activity involving five people or was otherwise extensive. The Sixth Circuit affirmed, finding that one defendant was the mastermind of the entire scheme and that the other was responsible for the majority of the internet postings and for obtaining the money generated by the scheme. U.S. v. Nicolescu, __ F.4th __ (6th Cir. Oct. 5, 2021) No. 19-4247.
3d Circuit upholds leadership role for “bosses” of extensive crack cocaine organization. (431) At defendants’ sentencing for drug trafficking, the district court added four levels under § 3B1.1(a) for being leaders of criminal activity that was otherwise extensive. The Third Circuit affirmed, noting that the coconspirators identified defendants as “the boss” of their respective conspiracies, defendants bought crack in bulk and hired and controlled their workers, and kept the lion’s shares of the drug proceeds. Trial evidence also established that the offense conduct was extensive. U.S. v. Jarmon, __ F.4th __ (3d Cir. Sept. 15, 2021) No. 19-1652.
1st Circuit upholds role increase for second-in-command of gang. (431) Defendant was convicted of RICO based on his membership in a gang. At sentencing, the district court added three levels under § 3B1.1 because of defendant’s role in the offense. The First Circuit affirmed, based on trial testimony that defendant was second-in-command of the gang, collected dues, and was responsible for authorizing actions by the gang. U.S. v. Sandoval, __ F.3d __ (1st Cir. July 7, 2021) No. 18-1995.
1st Circuit upholds leadership enhancement because defendant gave orders to another conspirator. (431) At sentencing for defrauding the federal government, the court added two levels under § 3B1.1(c) for defendant’s leadership role in the offense. The First Circuit upheld the increase because defendant gave another conspirator frequent orders to commit criminal activity. U.S. v. Grullon, __ F.3d __ (1st Cir. Apr. 27, 2021) No. 19-1780.
1st Circuit finds no error in leadership increase for defendant but not accomplice. (431) Defendant argued that the district court erred in giving him a leadership enhancement under § 3B1.1(c) for his fraud conviction because the district court had not given an enhancement to his coconspirator. The First Circuit found that defendant was more culpable than his coconspirator and that defendant was the architect of the scheme. The court also noted that defendant would not have to pay the large restitution award because he would be deported after he served his sentence. U.S. v. Grullon, __ F.3d __ (1st Cir. Apr. 27, 2021) No19-1780.
D.C. Circuit bases supervisor role on defendant’s admissions. (431) Defendant pleaded guilty to RICO conspiracy based on his role as an enforcer for a Mexican gang. At sentencing, the district court added two levels under § 3B1.1(c) for supervisory role because defendant was a commander of a hit squad. The D.C. Circuit upheld the enhancement, relying on defendant’s admission that commanders engaged in a number of supervisory activities. U.S. v. Flores, __ F.3d __ (D.C. Cir. Apr. 23, 2021) No. 19-3100.
6th Circuit finds defendant waived objection to leadership enhancement. (431)(850) At sentencing, defense counsel said he did not object to a leadership role increase under § 3B1.1 because he could not in good faith. The district court imposed the increase, and on appeal, the Sixth Circuit found that defendant had waived any objection. The panel also found “ample reasons for the leadership designation,” including defendant’s recruitment and supervision of participants and his possession of a large quantity of money. U.S. v. Jackson, __ F.3d __ (6th Cir. Apr. 22, 2021) No. 18-5676.
5th Circuit finds drug trafficker had managerial role in drug enterprise. (431) Defendant was convicted of drug trafficking. At sentencing, the court added three levels under § 3B1.1(b) for being the organizer or leader of criminal activity that involved five or more people. On appeal, the Fifth Circuit affirmed, relying on trial testimony showing that defendant had a decision-making role in the enterprise. A coconspirator testified that defendant required his buyers and him to remain in contact with defendant before, during, and after drug transactions and that defendant routinely threatened the coconspirator if business slowed down. U.S. v. Omigie, __ F.3d __ (5th Cir. Oct. 7, 2020) No. 19-40526.
8th Circuit finds defendant supervised at least two other persons. (431) Defendant was convicted of drug trafficking. At sentencing, the district court enhanced defendant’s offense level by three under § 3B1.1(b) for being a manager or supervisor of extensive criminal activity. The Eighth Circuit found no error, relying on trial testimony showing that defendant supervised two men who drove him on his drug-dealing rounds. U.S. v. Lewis, __ F.3d __ (8th Cir. Sept. 30, 2020) No. 19-2544.
8th Circuit affirms leadership increase despite claim that girlfriend controlled illegal activity. (431) At sentencing for drug trafficking, the district court added two levels under § 3B1.1(c), finding that defendant was an organizer, leader, manager, or supervisor of one or more other participants in a criminal activity. Defendant argued that his girlfriend was actually the mastermind of the drug trafficking. On appeal, the Eighth Circuit upheld that increase, noting that the girlfriend had testified at trial that defendant controlled the distribution of drugs. U.S. v. Jefferson, __ F.3d __ (8th Cir. Sept. 17, 2020) No. 19-3159.
6th Circuit says co-managers can be managers or organizers. (431) Defendant participated in a scheme to defraud health insurance companies. He was convicted of identity theft, healthcare fraud, and money laundering. At sentencing, the district court added two levels under § 3B1.1(c) for being a manager or organizer of the fraud. On appeal, the Sixth Circuit affirmed, finding that defendant had supervised one of the patients-for-hire. The panel ruled that even if defendant shared his managerial duties with others, nothing in § 3B1.1 excludes co-managers. U.S. v. Chavez, __ F.3d __ (6th Cir. Feb. 21, 2020) No. 19-5016.
8th Circuit affirms organizer enhancement for running heroin ring. (431) Defendant participated in a heroin trafficking ring. He pleaded guilty to two counts of distribution of heroin, and a jury convicted him of conspiracy to traffic in heroin. The government presented evidence that defendant sold heroin to more than 12 people, that he exercised control over “runners” who delivered heroin, and that he was part of a group that sold heroin. At sentencing, the district court enhanced defendant’s offense level under § 3B1.1(a) for organizing or leading five or more participants in the criminal activity. The Eighth Circuit found that the record amply supported the district court’s aggravated role finding. U.S. v. Outlaw, __ F.3d __ (8th Cir. Jan. 8, 2020) No. 18-2958.
8th Circuit says defendant managed cocaine codefendant. (431) Defendant supplied the codefendant with names and addresses that could be used to ship cocaine from Mexico to the U.S., and the codefendant picked up the packages containing cocaine that were sent to these individuals. At sentencing for drug trafficking, the district court enhanced defendant’s offense level by three under § 3B1.1(b) because he managed or supervised his codefendant. The Eighth Circuit upheld this enhancement, finding that the record sufficiently showed that defendant had supervised his codefendant. U.S. v. Guzman, __ F.3d __ (8th Cir. Jan. 2, 2020) No. 18-3488.
4th Circuit says prostitutes can be counted as participants in criminal activity. (431) Defendant ran a prostitution ring. At sentencing, the district court imposed a four-level enhancement under § 3B1.1(a) for being the organizer or leader of a criminal activity that involved five or more participants. Defendant argued that the prostitutes were victims and not part of the criminal activity that could be counted for an organizer or leader enhancement. The Fourth Circuit held that where interstate prostitution is the relevant conviction, the prostitutes, who were not minors, could be counted as participants. U.S. v. Muslim, __ F.3d __ (4th Cir. Nov. 25, 2019) No. 16-4304.
2d Circuit finds defendant managed five people, including three to whom he sold drugs. (431) Defendant pleaded guilty to drug trafficking. At sentencing, the district court enhanced defendant’s sentence by three under § 3B1.1(b) because defendant was the manager or organizer of criminal activity that involved at least five people. The district court relied on the three people to whom defendant sold drugs and the person that defendant employed to “monitor” one of the drug sellers. Counting defendant, the district court found that this criminal activity involved five people. The Second Circuit upheld the district court’s finding that the criminal activity involved five people. U.S. v. Pristell, __ F.3d __ (2d Cir. Oct. 22, 2019) No. 19-1308.
7th Circuit applies “supervisor” increase regardless of number of people supervised. (431) Defendant was convicted of drug trafficking. At sentencing, the district court enhanced her offense level by three under § 3B1.1 because defendant was “a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants.” Defendant argued that she only supervised three people, not five, and those people were not participants in the drug-trafficking organization. The Seventh Circuit held that defendant conflated the number of people in the criminal organization with the number of people she supervised. The organization contained more than five people and defendant supervised at least one of them. U.S. v. De La Torre, __ F.3d __ (7th Cir. Oct. 10, 2019) No. 18-2009.
9th Circuit affirms leadership role in health-care fraud scheme. (431) Defendant ran a scheme that defrauded Medicare by referring patients to physical therapy companies; the patients never received any care from the physical therapy companies, but the companies nevertheless billed Medicare and paid a kickback to defendant. Defendant located the physical therapy companies, gave them the patients’ Medicare information, instructed them to bill for longer periods of physical therapy to pad the amount they received, and took more than half of the amounts that Medicare paid. At defendant’s sentencing for health-care fraud, the district court added four levels under § 3B1.1 for being an organizer or leader of criminal activity involving five people. The Ninth Circuit affirmed, rejecting defendant’s argument that he did not organize or lead anyone. U.S. v. Hong, __ F.3d __ (9th Cir. Sept. 12, 2019) No. 17-50011.
8th Circuit upholds two-level manager enhancement. (431) Defendant was a check printer in a check-fraud scheme. He recruited a “runner” to the scheme, as well as a person who provided “runners” and check negotiators. At his sentencing for fraud offenses, the district court enhanced his offense level by two under § 3B1.1(c) because defendant was “an organizer, leader, manager, or supervisor” of a scheme that involved at least five people. The Eighth Circuit rejected defendant’s argument that he was “simply a participant” in the scheme and upheld the enhancement. U.S. v. Sesay, __ F.3d __ (8th Cir. Sept. 11, 2019) No. 18-1071.
8th Circuit denies role reduction where defendant’s role was more than “de minimis.” (431) Defendant participated in a scheme to distribute methamphetamine by providing protection to a drug dealer and by distributing drugs himself. A jury convicted him of drug trafficking. His guidelines range was 210 to 262 months. The district court denied a mitigating role reduction under § 3B1.2, finding that defendant’s role was “more than de minimis,” but nevertheless varied downward to 188 months. On appeal, the Eighth Circuit affirmed, holding that although defendant may have played a lesser role than others, the district court did not err in denying him a minor role reduction. U.S. v. Brown, __ F.3d __ (8th Cir. July 16, 2019) No. 18-1673.
8th Circuit says defendant was a “manager” even though he did not begin tax scheme. (431) Defendant and three others ran a scheme to prepare false tax returns. At sentencing, the district court found that defendant was manager or supervisor of a criminal operation with five or more participants. See § 3B1.1(b). On appeal, the Eighth Circuit affirmed, noting that defendant recruited the majority of filing conspirators, collected personal information, and supervised one of the individuals who filed the returns. These activities were sufficient to justify the two-level increase even though another individual began the scheme. U.S. v. Osman, __ F.3d __ (8th Cir. July 11, 2019) No. 18-1502.
8th Circuit finds fraudulent activity was “otherwise extensive.” (431) Defendant ran a company that defrauded Medicaid. At his sentencing for fraud offenses, the district court found under § 3B1.1(a) that he was an organizer or leader of criminal activity involving at least five people. On appeal, the Eighth Circuit affirmed on the alternative ground that the criminal activity was “otherwise extensive.” The court found that defendant’s fraudulent activity lasted more than ten years and led to losses in the millions and that defendant had lied to numerous employees about the fraud. U.S. v. Belfrey, __ F.3d __ (8th Cir. June 28, 2019) No. 18-1405.
7th Circuit finds that fraud scheme running for six years was “otherwise extensive.” (431) Guideline § 3B1.1 requires a four-level increase if defendant was the “organizer or leader” of criminal activity that “involved five or more people or was otherwise extensive.” Defendant ran a scheme that defrauded a cable television provider for over six years. The scheme involved 384 fraudulent accounts spread across 150 multi-dwelling buildings and involved employees, authorized dealers, cable television representatives, building owners and managers, and hundreds of residents. At sentencing for fraud offenses, the district court found this scheme was “otherwise extensive.” On appeal, the Seventh Circuit affirmed, agreeing that the scheme was “otherwise extensive.” U.S. v. Harmelech, __ F.3d __ (7th Cir. June 24, 2019) No. 18-2169.
8th Circuit finds ongoing relationship with drug source showed that source was a participant. (431) At sentencing, the district court added four offense levels under § 3B1.1 based on its finding that defendant was the organizer or leader of a drug-trafficking enterprise that involved five participants, including the source of the drugs. Defendant argued that his drug source was not a participant in his offense, but the Eighth Circuit held that an ongoing relationship with a source can support an enhancement under § 3B1.1. Because defendant was trying to show the source that he could sell large quantities of methamphetamine, the Eighth Circuit concluded that he had an ongoing relationship. U.S. v. Guzman, __ F.3d __ (8th Cir. June 13, 2019) No. 18-1506.
D.C. Circuit agrees with “organizer or leader” designation over “manager or supervisor.” (431) Defendant, a postal employee, was the ringleader of a scheme that delivered packages sent from California containing marijuana to persons not named in the addresses. Defendant conspired with other postal employees to deliver the packages, and when officers arrested him he possessed $10,000 and a Porsche automobile, and had taken three Caribbean vacations, all on a net salary of $16,000 per year. At sentencing, the district court enhanced his offense level by four under § 3B1.1(c) because it found that defendant was an “organizer or leader” of criminal activity. Defendant argued that his offense level should have been enhanced by three because he was only a “manager or supervisor” of criminal activity. The D.C. Circuit held that because defendant had recruited others to the scheme and took a large share of the proceeds, the district court had not erred in enhancing his offense level by four rather than three. U.S. v. Norman, __ F.3d __ (D.C. Cir. June 11, 2019) No. 17-3070.
8th Circuit affirms leadership role despite lack of “intent” to be a leader. (431) Defendant pleaded guilty to drug trafficking. At sentencing, the district court enhanced defendant’s offense level by two under § 3B1.1(c) because he was an organizer, leader, manager, or supervisor of criminal activity. Defendant objected to this enhancement, but the Eighth Circuit found that defendant supervised one of his associates in the distribution of drugs and that two of defendant’s associates delivered and picked up drugs at defendant’s direction. The court rejected defendant’s claim that he had no “affirmative intent” to engage in a leadership role. U.S. v. House, __ F.3d __ (8th Cir. May 7, 2019) No. 17-2341.
10th Circuit finds evidence shows managerial role in drug trafficking. (431) At defendant’s sentencing for drug trafficking, the district court enhanced defendant’s offense level by three under § 3B1.1(b) because defendant was the manager or supervisor of criminal activity involving five or more participants. The district court found that defendant was the manager or supervisor of two members of the conspiracy, he exercised decision-making authority over these conspirators, took a larger share of the revenue from the drug conspiracy, and other conspirators were dependent on defendant for transportation and housing. With these findings, the Tenth Circuit rejected defendant’s argument on appeal that he was a mere middleman who had no supervisory authority over anyone. U.S. v. Lozano, __ F.3d __ (10th Cir. Apr. 19, 2019) No. 18-1031.
1st Circuit upholds finding that defendant led five participants in criminal activity. (431) Defendant, an ATF agent, participated in a residential burglary and was convicted of civil rights violations. At sentencing, based on trial testimony, the district court found that defendant was an organizer or leader of criminal activity that involved five or more participants under § 3B1.1(a). The court sentenced defendant to 87 months. On appeal, he claimed that evidence in the presentence report did not support the enhancement. The First Circuit found that defendant had committed the burglary with two “thugs” and three other ATF agents and that the district court did not abuse its discretion in applying the enhancement. U.S. v. Martinez-Mercado, __ F.3d __ (1st Cir. Mar. 25, 2019) No. 16-2116.
D.C. Circuit upholds reliance on hearsay from cooperating witnesses to apply leadership increase. (431)(770) Defendant pled guilty to drug conspiracy charges. The district court applied a § 3B1.1(a) leadership enhancement, noting that all three cooperating witnesses “reported that the defendant was the top authority in charge of controlling various geographic areas in Mexico.” The statements of two witnesses were hearsay, relayed to the court by case agents. The D.C. Circuit found no error in the court’s consideration of the hearsay, finding sufficient corroboration to make the hearsay reliable. The court took care to rely only upon facts substantiated by more than one cooperator. Because the reports were mutually corroborative and the district court took due care in weighing the evidence, the court did not abuse its discretion in crediting the cooperators’ statements. U.S. v. Leyva, __ F.3d __ (D.C. Cir. Feb. 26, 2019) No. 17-3027.
8th Circuit upholds finding of supervisory role even though scheme was large. (431) Defendant was recruited to join in a scheme to defraud elderly persons by falsely telling them that their relatives in the Dominican Republic needed money. Defendant quickly rose through the ranks of the scheme and began recruiting others to join in the scheme. Defendant also became a “crew leader,” supervising those he had recruited. At sentencing, the district court found that defendant had a supervisory role in the scheme. The Eighth Circuit upheld this conclusion, finding that defendant played a supervisory role even though the scheme was very large. U.S. v. Rodriguez, __ F.3d __ (8th Cir. Feb. 7, 2019) No. 17-3807.
5th Circuit affirms leadership or organizer role in drug conspiracy. (431) Defendant was convicted of drug trafficking and firearms charges. The Fifth Circuit upheld the district court’s § 3B1.1(c) organizer/leadership enhancement. Trial evidence showed that Cantu sold drugs for defendant and defendant controlled Cantu in their activities. In return for living in defendant’s home, Cantu was available to assist defendant as needed. Cantu testified that he “worked for” defendant and that defendant once described their relationship as “him being the chief and me being the Indian.” Cantu admitted that he also sold drugs, particularly marijuana and cocaine, for his own profit. However, he stated that there was an “understanding” that he would obtain these drugs from defendant in order to “keep the money in the house.” The record also showed that defendant exercised extensive control over many aspects of the underlying offenses. U.S. v. Gomez, __ F.3d __ (5th Cir. Sept. 26, 2018) No. 17-10690.
8th Circuit agrees that defendant was leader or organizer of counterfeit check cashing scheme. (431) Defendant was convicted of charges based on a scheme to defraud financial institutions in the Minneapolis-St. Paul metro area by cashing counterfeit checks drawn on accounts of businesses and individuals. The district court found that defendant was an organizer or leader under § 3B1.1(a) based on its findings that defendant “called meetings, monitored accounts, obtained victim information, was in many respects in the Court’s view the initiator of the conspiracy and was involved from start to finish.” The Eighth Circuit found no clear error. U.S. v. Gaye, __ F.3d __ (8th Cir. Aug. 29, 2018) No. 17-1327.
8th Circuit upholds manager or supervisor increase for role in counterfeit check scheme. (431) Defendant was convicted of charges based on a scheme to defraud financial institutions by cashing counterfeit checks drawn on accounts of businesses and individuals. The district court applied a three-level enhancement for being a manager or supervisor, finding there was “some level of organization” by defendant, but the court did not consider him on the same level as the scheme’s leader. The Eighth Circuit affirmed the § 3B1.1(b) enhancement. Defendant’s residence was a major hub of the fraudulent scheme and he organized other participants. Defendant also hosted meetings with his co-conspirators where they discussed logistics of the scheme and distributing profits. Defendant’s role as a manufacturer gave him a central role in the offense, as without him the scheme could not persist. U.S. v. Gaye, __ F.3d __ (8th Cir. Aug. 29, 2018) No. 17-1327.
11th Circuit affirms defendant’s leadership role in gang without “strict hierarchy.” (431) Defendant, a member of a gang of drug dealers, was convicted of drug trafficking, firearms possession, armed robbery and assault charges. The Eleventh Circuit held that the district court did not clearly err when it applied a § 3B1.1(a) leadership enhancement. It correctly explained that “being characterized as boss is not controlling” and instead considered specific facts that established defendant’s role as a leader. Although there was no “strict hierarchy,” in the gang, the court noted that “[e]verybody who testified … agree[d]” that defendant was a “shot caller[ ]” who “inspired or promoted or directed the activities” of the gang. The district court was entitled to find that defendant was a leader in the criminal activity of the gang. U.S. v. Dixon, __ F.3d __ (11th Cir. Aug. 24, 2018) No. 15-14354.
8th Circuit affirms leadership role in firearm export scheme. (431) Defendant pled guilty to charges based on a scheme to export firearms to Lebanon. The Eighth Circuit upheld a four-level leader/organizer enhancement under § 3B1.1(a). Defendant made arrangements for the first two firearms shipments, negotiated with buyers in Lebanon, made the final decision as to whom the firearms would be sold in Lebanon, and he alone traveled to Lebanon to arrange for the sale of the August 2014 shipment’s firearms. A Homeland Security agent testified that defendant was responsible for distributing the proceeds from the sales and that defendant made the decision to sell the firearms from the March 2014 shipment to his cousin against a co-conspirator’s wishes. The agent further testified that defendant negotiated future resale agreements, had received a monetary advance to purchase more firearms, and then supplied his son with funding to make more purchases. U.S. v. Zeaiter, __ F.3d __ (8th Cir. June 11, 2018) No. 16-4066.
8th Circuit finds firearm export conspiracy involved five or more and was otherwise extensive. (431) Defendant pled guilty to charges based on a scheme to export firearms to Lebanon. The Eighth upheld a three-level managerial role enhancement under § 3B1.1, rejecting defendant’s claim that the conspiracy did not involve five or more people and was not otherwise extensive. Here the criminal activity involved Ali, defendant, Zeaiter, Adam, and multiple firearms dealers in Lebanon. Because there was an ongoing relationship with at least one of these dealers, the dealer was properly considered to be a participant. Moreover, the criminal activity was otherwise extensive. Defendant and the others obtained permits to purchase firearms, bought heavy machinery with a plan to conceal the firearms and ammunition therein, shipped multiple containers to Lebanon containing the firearms, traveled internationally to sell the contents of the shipments, and developed relationships with international firearms dealers for continued sales. U.S. v. Zeaiter, __ F.3d __ (8th Cir. June 11, 2018) No. 16-4066.
8th Circuit agrees that defendant held managerial or supervisorial role in meth conspiracy. (431) Defendant was convicted of conspiracy to distribute methamphetamine. The Eighth Circuit held that the district court did not clearly err in finding that defendant played a managerial or supervisory role in the conspiracy. Pfeffer testified that she and Tovar obtained approximately 40 ounces of meth from defendant over the course of numerous meetings. She also testified that defendant fronted the meth, knew they were reselling it, and required them to repay him. Thus, contrary to defendant’s allegations, Pfeffer and Tovar were not merely end users or customers but participants in the conspiracy. Furthermore, Pineda testified that defendant recruited him into the drug conspiracy. He and LeClaire testified that defendant fronted them large quantities of meth sell on his behalf. Additionally, defendant obtained multiple pounds of meth in California and twice directed Pineda to transport the drugs back to South Dakota. U.S. v. Lora-Andres, 844 F.3d 781 (8th Cir. 2016).
1st Circuit finds five participants in government contractor’s embezzlement scheme. (431) Defendant was the head of a bus system (USBC) with a government contract with a regional transit authority. He used his political clout as a former state legislator to divert federal funds granted to the transit authority, and was convicted of conspiracy and embezzlement. The First Circuit upheld a four-level enhancement leadership enhancement under §3B1.1(a), concluding that the criminal enterprise that included five or more participants. Defendant unquestionably was a participant. Santos and Rocha accepted salaries funded by the transit authority for work they did not do and, thus, knowingly furthered the criminal enterprise. Peixoto was also a participant. Peixoto abetted the defendant’s corrupt activities, and admitted to the grand jury that he willfully “failed to disclose to federal auditors that USBC employees … were absent from USBC during work hours and instead were working at [the defendant’s f]arm.” Finally, the court could could properly find that Cosentino, the head of the transit authority, participated in the criminal activities by turning a blind eye to the defendant’s use of the transit authority resources for improper purposes. U.S. v. George, 841 F.3d 55 (1st Cir. 2016).
8th Circuit upholds enhancement for leader of unauthorized credit card scheme. (431) Defendant was part of a group who obtained gift cards and credit cards embossed with the names of three group members and encoded with stolen information. He pled guilty to conspiracy to possess 15 or more counterfeit access devices and related charges. The Eighth Circuit upheld a §3B1.1(a) increase for being an “organizer or leader of a criminal activity that involved five or more participants.” Defendant’s conduct met almost every one of the factors listed in Note 4 to §3B1.1. Defendant admitted that he had “directed others to use” the fraudulent credit cards and “arranged for” the delivery of several packages of fraudulent cards. He also admitted that his co-defendants were to provide him with the illegal proceeds and he promised “them a percentage of the money obtained” in exchange. Moreover, every one of his co-defendants indicated that defendant had been the leader, that he had controlled the fraudulent cards, and that he had controlled the money obtained from the cards. Two of defendant’s co-defendants additionally stated that defendant had recruited them into the scheme and that he had received the largest share of the illegal proceeds. U.S. v. Thomas, 841 F.3d 760 (8th Cir. 2016).
1st Circuit affirms role enhancement based on co-conspirator testimony. (431) Defendant pled guilty to crack cocaine conspiracy charges. The sentencing court applied a three-level enhancement under §3B1.1(b) for defendant’s leadership role in the conspiracy. Defendant claimed that he simply followed orders. The First Circuit found no error. The testimony of several co-conspirators confirmed defendant’s exercise of operating control over various individuals at different times. For example, the leader, Cabrera, testified that the defendant was responsible for keeping him updated on the financial aspects of the conspiracy. Mally testified that defendant was “in charge when Cabrera was not in Bangor.” Jordan testified that defendant was known as “the General” and was the drug ring’s de facto “head of operations.” Lewis testified that defendant was “in charge of the crew.” The record solidly supported the district court’s conclusion that defendant was not “out on the street” but, instead, was responsible for overseeing retail sellers and trusted by Cabrera to exert control over other players in the enterprise. U.S. v. Nunez, 840 F.3d 1 (1st Cir. 2016).
6th Circuit agrees that defendant was leader of bank fraud scheme. (431) Defendant participated in a bank fraud scheme with Becker and others to obtain a mortgage and two lines of credit on a luxury house. The Sixth Circuit upheld a §3B1.1(c) enhancement, agreeing that defendant was a leader and organizer of the bank fraud. Defendant recruited Becker to be a straw buyer for the house, and defendant served as the link between Becker and the unindicted co-conspirators. Defendant was involved in the scheme before Becker and used her name to buy the house, which strongly supported the notion that he was a leader of the conspiracy. Defendant, not Becker, lived in the multi-million dollar house for four years. Also, defendant organized the scheme by telling First Bank that Becker worked for his company and that she earned a salary well into the six figures. Moreover, it was Becker’s name that defendant used to obtain $600,000 in home-equity loans. Finally, the plea transcript suggested that defendant moved funds in and out of Becker’s bank account at will after the home-equity loans were de¬posited. U.S. v. Tanner, __ F.3d __ (6th Cir. Sept. 13, 2016) No. 15-3719.
7th Circuit finds defendant was organizer or leader of fraudulent tax refund scheme. (431) Defendant was convicted of fraud and identity theft charges relating to the use of stolen identities to obtain fraudulent federal tax refunds. He challenged the district court’s application of a two-level enhancement for being an organizer or leader of a criminal enterprise. The Seventh Circuit affirmed the enhancement. There was evidence that defendant assigned his co-conspirators their roles within the conspiracy. He also recruited his co-conspirators and brought them together for purposes of executing the fraudulent scheme. Defendant exerted significant control over his co-conspirators and their actions in furtherance of the scheme. In one instance, when co-conspirator Taylor asked defendant if he should continue filing the bogus returns after having already filed a first batch, defendant gave the “green light.” In that same exchange, defendant said that “[i]f my money gets fucked up, I’m gonna kill everybody involved ….” U.S. v. Shannon, 836 F.3d 815 (7th Cir. 2016).
10th Circuit upholds leadership increase despite error in failing to state factual basis for it. (431) A jury convicted defendant of various drug crimes, including possession with intent to distribute methamphetamine. At sentencing, the government requested a two-level in¬crease under §3B1.1(c) for defendant’s role as an organizer, leader, manager, or supervisor of two women couriers who purchased and delivered the meth. The court applied the enhancement, finding “significant evidence … that defendant was, in fact, a leader/organizer…” Defendant argued for the first time on appeal that the court did not clearly articulate its reasons and that the increase was not supported by the evidence. The Tenth Circuit affirmed even though it found that the court erred in failing to state reasons for the leadership enhancement, The error did not satisfy the plain error test, because defendant did not show a reasonable probability that, but for the error, the results of the proceeding would have been different. The leadership enhancement was amply supported by the evidence at trial of defendant’s supervision of the couriers. At the very least, defendant coordinated and oversaw the meth purchase and transfer from Arizona, and therefore qualified as an organizer under §3B1.1. U.S. v. Marquez, 833 F.3d 1217 (10th Cir. 2016).
7th Circuit infers from defendant’s transportation of $5 million in cocaine that he held supervisory role. (431) Defendant pled guilty to drug charges, and admitted transporting 200 kilograms of cocaine, worth $5 million, on behalf of the Sinaloa Cartel, and to receiving a further 76 kilograms to be sold on consignment for about $2 million. The Seventh Circuit upheld a §3B1.1(b) supervisor enhancement. The district court found that the Sinaloa Cartel was substantially larger than five participants, and that defendant had criminal contact with at least that many persons. Supervising any one of them supported the enhancement, and moving 276 kilograms of cocaine required the assistance of multiple people. The district judge inferred from the fact that the Sinaloa Cartel was willing to trust defendant with $7 million worth of cocaine that he had a high status in the organization and was in a position to tell at least some other people what to do, rather than being at the bottom of the totem pole. That inference was not clearly erroneous. Moreover, defendant effectively admitted supervising some others. As part of his plea, he stated that “utilized” an unnamed conspirator’s connections to arrange for transporting the cocaine. U.S. v. Vasquez-Hernandez, 834 F.3d 852 (7th Cir. 2016).
8th Circuit upholds manager increase where defendant directed others during at least one drug shipment. (431) Defendant pled guilty to several drug-related offenses. He argued on appeal that the district court erred by enhancing his sentence under §3B1.1(b) based on his role as a manager or supervisor. The Eighth Circuit found no clear error. Defendant directed other members of the organization and enlisted their aid during at least one drug shipment. A special agent for the Department of Homeland Security testified that he intercepted a phone conversation in which defendant gave directions to two couriers who were bringing drugs to Kansas City. Defendant told the couriers to meet him at a specific location, and explained that he would switch vehicles with the couriers in order to take the drugs to a stash house. Defendant told another participant to bring a scale to weigh the new shipment of cocaine, and he then drove the empty van back to the couriers and gave them money. Thus, defendant personally managed the transaction and was responsible for ensuring that the deal took place. This was sufficient to support the §3B1.1(b) enhancement. U.S. v. Valencia, __ F.3d __ (8th Cir. July 22, 2016) No. 15-2173.
8th Circuit agrees that defendant held leadership role in stolen vehicle ring. (431) Defendant was convicted of charges relating to a conspiracy to steal commercial trucks, trailers, and cargo, and alter vehicle identification information. The Eighth Circuit upheld a four-level leadership enhancement. Defendant led scouting parties to find vehicles. He directed a co-conspirator to remove VIN numbers to prevent police detection. He stole merchandise and arranged for its transportation, storage, and purchase. It was not clear error to apply the 4-level leader/organizer enhancement. U.S. v. Borders, __ F.3d __ (8th Cir. July 12, 2016) No. 14-3828.
8th Circuit agrees that defendant was leader or organizer of drug-trafficking conspiracy. (431) Defendant was convicted of several drug-trafficking and firearms-related charges. He challenged a four-level organizer/leader enhancement under §3B1.1(a), arguing that he did not exercise any control or decision-making authority over his co-conspirators. The Eighth Circuit disagreed. Trial testimony and recorded phone conversations indicated that defendant instructed his sister to deliver cocaine on his behalf, and on at least one occasion ordered co-conspirator Thompson to conduct a sale on his behalf, with Thompson receiving no compensation for doing so. Moreover, defendant was a high-volume distributor with several customers, some of whom purchased cocaine on credit. The district court did not clearly err in finding that defendant was a leader or organizer of the conspiracy. U.S. v. Colbert, __ F.3d __ (8th Cir. July 8, 2016) No. 15-1374.
D.C. Circuit affirms managerial role enhancement in cocaine case. (431) Defendant was part of a Columbian organization that conducted a large-scale cocaine-trafficking operation. The district court applied a three-level enhancement under §3B1.1(b) for being a manager or supervisor in the drug conspiracy. The D.C. Circuit affirmed. The district court expressly found that defendant supervised numerous culpable individuals. The record, including co-conspirator Santiago’s testimony that she worked alongside 80 employees in a cocaine laboratory run by defendant, supported this finding. U.S. v. Vega, __ F.3d __ (D.C. Cir. June 24, 2016) No. 10-3083.
8th Circuit upholds leadership increase for corporate insider who organized fraud scheme. (431) Defendant pled guilty to conspiracy to commit mail fraud based on defrauding his employer, Hearthside, by means of false invoices from companies created by his friends. The Eighth Circuit upheld a §3B1.1(a) increase, finding that defendant’s admissions in his plea agreement showed by a preponderance that he was an organizer or leader of the conspiracy. He was the only conspirator who was an insider at Hearthside. He “concocted” the scheme, and with knowledge about Hearthside’s purchase order system and access to it, he submitted the purchase orders. Defendant decided which purchase orders to submit from front companies and when. His admissions showed he had a high “degree of participation in planning or organizing the offense.” Note 4 to §3B1.1. U.S. v. Coles, __ F.3d __ (8th Cir. June 17, 2015) No. 15-3732.
(315)(431)(450)(715)(870) U.S. v. Christensen, 801 F.3d 970 (9th Cir. 2015), amended without changing the summaries, __ F.3d __ (9th Cir. July 8, 2016) No. 08-50531.
5th Circuit agrees that defendant was leader of marijuana conspiracy. (431) Defendant challenged an increase under §3B1.1(a) for being a leader of a marijuana conspiracy. Co-conspirator Pieper testified that he and defendant were partners and equally split the drug profits. He stated that López would call “every single day” asking for money, and that he and defendant would take turns “push[ing] [their] people for their money.” He said that if López reported that the payment was short, he and defendant would make up the difference. Pieper also described how he and defendant went to Mexico to inspect the marijuana that López was going to send them in Indiana. And although defendant contended that there was no evidence that he exercised any control over the manner in which his customers sold marijuana, Martin testified that defendant directed people to conduct drug transactions at his paint shop. Furthermore, when defendant pleaded guilty to state charges in 2010, he admitted that he arranged for the sale of 24 pounds of marijuana to Tarter, a confidential informant. Accordingly, the Fifth Circuit upheld the district court’s finding that defendant was an organizer or leader. U.S. v. Romans, __ F.3d __ (5th Cir. May 19, 2016) No. 13-40219.
6th Circuit agrees that bishop of Amish community held leadership role in hair-cutting and beard-shearing attacks. (431) Sixteen defendants, members of an Amish community, were convicted of crimes stemming from a spate of hair-cutting and beard-shearing attacks against other Amish individuals. The Sixth Circuit upheld a four-level leadership enhancement for defendant Samuel. He was the bishop of the Bergholz Amish community and controlled life there. One witness described him as “a dictator.” After each attack, including those where the assailants used a camera, everyone met at Samuel’s house. He also gave instructions to others about the camera. This was sufficient to uphold the enhancement. U.S. v. Mullet, __ F.3d __ (6th Cir. May 4, 2016) No. 15-3212.
8th Circuit upholds managerial increase for directing two-conspirators where to deposit drug proceeds. (431) Defendant pled guilty to methamphetamine conspiracy charges. The district court applied a §3B1.1 managerial role enhancement, and the Eighth Circuit affirmed. The record showed that the conspiracy involved five participants and that defendant directed the actions of two co-conspirators by instructing them where and how to deposit drug proceeds, and by instructing one of them to send photos of drug packages she received. This was sufficient to support the enhancement. U.S. v. Alcade, __ F.3d __ (8th Cir. Apr. 12, 2016) No. 15-1329.
9th Circuit upholds abuse-of-trust enhancement for medical device supplier. (431) Defendant and his wife ran a conspiracy to provide power wheelchairs to people who did not need them. Defendant referred Medicare-eligible individuals to a doctor, who prescribed the wheelchairs, and defendant’s wife supplied the wheelchairs. Defendant was convicted of health care fraud, in violation of 18 U.S.C. §1349. At sentencing, the district court imposed a two-level abuse-of-trust enhancement under §3B1.3. The Ninth Circuit held that power wheelchair suppliers can have the requisite “professional or managerial discretion” to qualify for the abuse-of-trust adjustment to apply if they are responsible for determining the need for the equipment and personally certify the validity of their claims to Medicare. U.S. v. Adebimpe, __ F.3d __ (9th Cir. April 28, 2016) No. 14-10303.
5th Circuit agrees that defendant held managerial role in drug conspiracy. (431) Defendant argued that the district court impermissibly applied a three-level enhancement for his role as a manager/supervisor in a methamphetamine distribution conspiracy. At sentencing, the district court found that the trial evidence showed that defendant was hiring individuals to drive him to pick up drugs, to rent cars for those pick-ups, and to rent hotel rooms where the drugs would be packaged for distribution, and that such evidence supported a finding that defendant acted in a managerial role in the conspiracy. The Fifth Circuit agreed, and upheld the §3B1.1(b) enhancement. U.S. v. Bowen, __ F.3d __ (5th Cir. Mar. 29, 2016) No. 14-40654.
8th Circuit finds defendant’s wife was participant in drug-making enterprise. (431) Defendant pled guilty to conspiracy to manufacture methamphetamine near a school. He received a three-level enhancement under §3B1.1(b) for being a manager of supervisor of criminal activity involving five or more participants. The Eighth Circuit rejected defendant’s argument that his wife was not a participant. According to the PSR, defendant’s wife purchased pseudoephedrine pills for her husband on two occasions. Defendant did not object to this statement, nor did he object to the inclusion of these pills in the drug quantity for which he was responsible. His wife’s act of supplying pseudoephedrine supported the court’s decision to count her as a participant. His wife had been a meth user, and the evidence showed that she allowed defendant to manufacture meth inside their shared apartment. This conduct likewise was consistent with participant status. U.S. v. Starks, __ F.3d __ (8th Cir. Mar. 8, 2016) No. 15-1574.
7th Circuit upholds supervisor increase for recruiting accomplice and claiming proceeds. (431) Defendant pled guilty to drug conspiracy charges and possession of a firearm for use in his drug trafficking. As part of his drug activity, defendant recruited Purifoy to sell heroin for him. He supplied the heroin to Purifoy with instructions to charge $100 per gram and return $80 to him; the $20 retained by Purifoy was compensation for making the sale. Based on this, the judge applied a two-level supervisor role increase under §3B1.1(c). The Seventh Circuit affirmed. Defendant recruited Purifoy to be an accomplice, instructed him on how to package heroin for sale, and claimed a much larger share (80 percent) of the revenue of Purifoy’s activity than Purifoy himself (20 percent). Defendant exercised decision-making authority over Purifoy, determined Purifoy’s compensation, and was the planner and organizer of the drug activity that he had recruited Purifoy to conduct. He also helped pay for a gun for Purifoy to protect the conspirators. U.S. v. Henry, __ F.3d __ (7th Cir. Feb. 17, 2016) No. 14-3810.
6th Circuit agrees that defendant held leadership role in vote-buying scheme. (431) Defendant and other family members attempted to secure his wife’s reelection as mayor of a Kentucky town by coercing and bribing voters to vote for her. The Sixth Circuit upheld a leadership enhancement under §3B1.1(c). The court found that defendant gave Mullins money for the purpose of buying votes for defendant’s wife. This amounted to leadership for purposes of §3B1.1(c). U.S. v. Robinson, __ F.3d __ (6th Cir. Feb. 8, 2016) No. 14-6164.
11th Circuit says associates’ help in check-cashing scheme made them participants in tax fraud counts. (431) Defendant was convicted of multiple counts of filing false tax returns, using an unauthorized access device, and aggravated identity theft. He challenged a §3C1.1(c) leadership role enhancement, asserting that because he was the only one who actually filed false tax returns, no one else was a “participant” for purposes of the enhancement. The Eleventh Circuit upheld the enhancement. Even though associates Gentner and Schnabel did not actually help defendant file the false tax returns, it was enough that they knowingly assisted defendant’s criminal tax scheme. Gentner and Schnabel played integral roles in a check-cashing scheme. Defendant’s failure to report the cash from those checks were the tax crimes. The district court did not clearly err in finding that at least one (and probably both) of them knew that defendant was engaged in a scheme to hide the source of his income for tax purposes and that they helped him do it. U.S. v. Zitron, __ F.3d __ (11th Cir. Jan. 21, 2016) No. 14-10009.
6th Circuit finds part owner of health care agency held leadership role in Medicare fraud. (431) Defendant was convicted of Medicare fraud charges arising from the operation of Acure Home Care, a fraudulent home health care agency. The Sixth Circuit upheld a § 3B1.1(a) leadership enhancement. Defendant was part owner of Acure (an enterprise that the district court found to be entirely fraudulent), she signed Medicare’s enrollment form, and she was the sole signatory on Acure’s bank accounts. Based on those facts alone, there was no clear error in finding she was a leader/organizer. U.S. v. Meda, __ F.3d __ (6th Cir. Dec. 23, 2015) No. 13-25990.
8th Circuit agrees that defendant who distributed cocaine to lower level dealers held managerial role. (431) Using controlled buys and telephone surveillance, investigators documented defendant selling cocaine to lower level dealers. He was arrested and convicted of distributing cocaine and related charges. On appeal, he challenged a three-level enhancement under § 3B1.1(b) for being a manager or supervisor of the conspiracy, claiming he was merely a wholesale distributor of cocaine to the co-conspirators. The Eighth Circuit upheld the enhancement. Defendant engaged in nearly the same conduct as the defendant in U.S. v. Gaines, 639 F.3d 423 (8th Cir. 2011), which upheld a § 3B1.1(b) enhancement. Defendant broke down large quantities of cocaine into smaller quantities for distribution to dealers. He sold at a set price but controlled neither the frequency nor amount of purchase nor the price upon resale. Defendant did not manufacture cocaine base from the cocaine, but he did “cut,” or dilute, it. He distributed the cocaine to at least six others. Like the Gaines defendant, defendant participated in the crime as the primary provider of narcotics for redistribution. Based on these similarities, there was no clear error in the district court’s manager-supervisor enhancement. U.S. v. Moralez, __ F.3d __ (8th Cir. Dec. 10, 2015) No. 14-3702.
10th Circuit finds leadership in attempted robbery showed leadership in overall drug conspiracy. (431) Defendant pled guilty to charges stemming from his involvement in a drug conspiracy. He challenged a § 3B1.1(a) leadership enhancement, claiming his only leadership was his organization of an attempted robbery of a rival drug dealer. The Tenth Circuit held that this was sufficient to support the leadership increase. Defendant led one of the would-be robbers, DaRyan, in the underlying drug conspiracy that involved five or more participants. Defendant specifically enlisted DaRyan to commit a robbery he had organized with the ultimate goal of advancing the operations of the drug-trafficking organization to which they both belonged. He gave DaRyan a mask and a gun so he could commit the robbery. Defendant’s actions during the robbery were consistent with those of a leader and organizer: he sat and watched the attempt from the safety of his vehicle while the man he recruited did his bidding. Moreover, DaRyan had been living with defendant for at least two months prior to the attempted robbery while defendant paid for all of his living expenses in exchange for his work selling drugs. U.S. v. Craig, __ F.3d __ (10th Cir. Dec. 22, 2015) No. 14-3185.
D.C. Circuit says court properly relied on jury’s finding that defendant was “organizer or leader.” (431) Defendant was convicted of drug conspiracy charges. The district court applied a four-level enhancement for being an organizer or leader of the drug trafficking organization. Defendant argued that this was error because the court never made the findings required to characterize him as an organizer or leader. The D.C. Circuit found no error, since the district court put the question to the jury in the form of a special verdict, and the jury found that defendant was an organizer or leader. The court did not err in relying on the jury findings because, although a court is permitted to make findings by a “preponderance of the evidence,” the jury resolved the question beyond a reasonable doubt. The jury did not fail to consider the specific factors that a sentencing court must examine when determining whether a defendant was an organizer or leader. The court specifically instructed the jury with respect to the factors set out in the guidelines and court precedent. U.S. v. Law, 806 F.3d 1103 (D.C. Cir. Dec. 1, 2015).
5th Circuit upholds enhancements for roles in drug conspiracy. (431) Defendant argues that he should not have received a four-level enhancement under § 3B1.1(a) for being an organizer or leader of a drug conspiracy. The district court heard specific testimony that defendant directed numerous others in carrying out the conspiracy. Defendant admitted that he supervised others, but asserted that “there was not enough evidence to support an enhancement higher than a manager or supervisor role under U.S.S.G. § 3B1.1(b) or (c).” The Fifth Circuit upheld the four-level increase, finding defendant’s unsupported assertion was not enough to show that the district court’s factual finding of his role as a leader was clearly erroneous. The panel also upheld co-defendant Navarro’s two-level enhancement under § 3B1.1(b) for being a manager or supervisor. The district court heard evidence that Navarro directed an associate to distribute drugs and allowed that associate to live in Navarro’s apartment in exchange for delivering drugs as Navarro directed. U.S. v. Benitez, __ F.3d __ (5th Cir. Dec. 11, 2015) No. 14-40046.
7th Circuit agrees that defendant was leader of street-level drug operation. (431) The district court found that defendant controlled drug sales at the intersection of Kedzie Avenue and Ohio Street for much of 2008 and 2009. Defendant challenged a four-level leadership enhancement under §3B1.1(a), but the Seventh Circuit found no plain error. There was no dispute that the Kedzie–Ohio organization involved more than five persons. Defendant was identified as maintaining control of the organization, by numerous co-conspirators in their plea agreements, statements to police, and testimony. The judge specifically found this testimony to be credible. Further, defendant received a larger share of the drug profits than any other member of the organization. He used threats of violence against competitors and rivals in the drug-trafficking business to defend the operation. He had decision-making authority over the organization, determining the operation’s direction on strategy and marketing. The district court’s finding that defendant was the leader was not plain error. U.S. v. Austin, __ F.3d __ (7th Cir. Nov. 20, 2015) No. 14-3135.
6th Circuit counts as drug “participants,” customers who drove prostitutes and “looked out” for defendant. (431) Defendant ran a criminal enterprise that involved distributing drugs and recruiting young female addicts to prostitute themselves for his benefit. Defendant challenged a four-level “organizer or leader” increase under U.S.S.G. § 3B1.1(a), arguing that several individuals counted by the court as participants in his criminal enterprise were merely his customers. The Sixth Circuit upheld the enhancement. At sentencing, the court specifically found that these individuals did more than simply purchase drugs. They transported victims to prostitution appointments, and in some instances, took minor victims to and from their homes. One of the individuals “was sort of looking out for [defendant] … and reporting things back to him that she might have heard others say or heard on the streets … to protect him or keep him out of danger…” Defendant’s counsel agreed that this assessment was accurate, and defendant did not dispute this finding on appeal. U.S. v. Mack, __ F.3d __ (6th Cir. Oct. 16, 2015) No. 14-3580.
8th Circuit agrees that defendant held leadership role in drug conspiracy. (431) Defendant pled guilty to drug conspiracy charges. He challenged on appeal a four-level leadership enhancement under § 3B1.1(a), claiming he lacked notice that the court was considering it. The Eighth Circuit disagreed, and upheld the increase. Defendant had actual notice that § 3B1.1(a) might be applied because the PSR, to which he objected, proposed it and stated the guideline’s text. The record supported the enhancement. Three witnesses at sentencing testified to selling heroin for defendant, and described how he set prices, gave directions to his sellers, and was “in charge.” It was therefore not clear error to find that defendant exercised decision making authority as an “organizer or leader.” Defendant’s criminal activity also involved five or more participants. In addition to the three mentioned sellers, two witnesses identified a fourth man who sold heroin for defendant and one of the sellers testified that he had witnessed defendant purchase heroin from suppliers in Chicago and Detroit. U.S. v. Ball, __ F.3d __ (8th Cir. Oct. 29, 2015) No. 15-1491.
5th Circuit upholds leadership increase for drug distributor. (431) Defendant was convicted of heroin conspiracy charges. The district court applied a four-level leadership enhancement under § 3B1.1(a), finding that defendant was “a source of supply of the heroin for Berry and Henderson,” he “directed Berry and Henderson to ‘the spot’ where the heroin was to be retrieved,” and he “directed them to switch telephones to avoid detection.” Defendant also “further directed Berry and Henderson to move more heroin.” Defendant argued that the court clearly erred because his tone was “not one of a leader, but of a partner.” Rather than directing his co-conspirators to get new cell phones, he merely stated that, “We’re going to go ahead and get some other lines, okay?” The Fifth Circuit held that defendant did not carry his burden of showing clear error. The district court’s interpretation of the “other lines” comment as imperative was plausible. A person’s status as a distributor in a drug conspiracy is relevant in determining both “the degree of participation in planning or organizing the offense” and “the nature and scope of the illegal activity.” U.S. v. Haines, __ F.3d __ (5th Cir. Oct. 15, 2015) No. 13-31287.
7th Circuit relies on videotapes to find that defendant acted as leader or organizer. (431) The district court applied a two-level enhancement after it found that defendant acted as a leader or organizer in a drug operation. The Seventh Circuit affirmed. A videotape showed defendant and Guerra mixing and packaging the heroin that would be sold in a September 29, 2009 transaction. Defendant could be heard on the video directing Guerra regarding what to do and how to package the heroin. Although defendant argued that the video only showed Guerra packaging heroin for himself (Guerra), the district court did not commit clear error when it reviewed the videotape and concluded that defendant was directing Guerra. A February 4, 2009 videotape further supported the district court’s finding that defendant acted as an organizer or leader over Guerra. There, supplier Harrington and defendant discuss a proposal for Harrington to give defendant some free drugs in return for defendant bringing Guerra to Harrington to test heroin. There was no clear error in the leadership increase. U.S. v. Burnett, __ F.3d __ (7th Cir. Oct. 13, 2015) No. 13-2882.
6th Circuit says scheme was “otherwise extensive” based on unknowing services of financial advisors. (431) Defendant was convicted of fraud and money laundering charges for financial crimes committed while he served as President and Executive Director of National Foundation of America. The Sixth Circuit upheld a §3B1.1(a) leadership enhancement. If the district court finds that the defendant directed someone else and the scheme to defraud was otherwise extensive, then it can apply the enhancement without singling out five individuals. Here, the scheme was quite extensive inasmuch as it involved the “unknowing services of many outsiders”: the many financial advisors who supplied “clients” for defendant to defraud. U.S. v. Olive, __ F.3d __ (6th Cir. Sept. 22, 2015) No. 13-6174.
7th Circuit upholds managerial role based on defendant’s conversations with conspiracy’s leader. (431) Defendant sold drugs at a housing project as part of a drug conspiracy headed by Freeman. The Seventh Circuit found that there were “ample grounds” to support a supervisory enhancement. The court noted various instances in which defendant prepared and packaged drugs at Freeman ‘s premises, the frequent communications between defendant and Freeman on matters related to drug distribution, and the shared methods and personnel used by defendant and Freeman to manufacture and distribute drugs. Pointedly, there was a recurring theme to these conversations: they repeatedly addressed the day-to-day operations of the organization and how to direct lower-level persons to carry out their duties. These were “the conversations of two persons in management roles giving advice and direction to each other.” U.S. v. Wilbourn, __ F.3d __ (7th Cir. Aug. 26, 2015) No. 13-3715.
6th Circuit says defendant who supervised juvenile drug couriers held managerial role. (431) Defendant was active in a drug conspiracy run by Shakir, her boyfriend, and pled guilty to drug and money laundering conspiracy counts. Her PSR stated that defendant traveled with two juvenile couriers from Nashville to a Las Vegas hotel and then on to Los Angeles. Defendant’s job was to “keep them in line” and ensure they followed Shakir’s instructions, including reporting to Shakir any failure by the couriers to follow his instructions. Once in Las Vegas, the couriers turned over the cash from the drug sales to defendant who gave it to Shakir. The Sixth Circuit upheld a § 3B1.1(b) managerial enhancement. The PSR’s finding that she supervised two juveniles transporting money and drugs between different cities was sufficient to support the § 3B1.1(b) enhancement. Defendant exerted the requisite control over the two juveniles even if she did not recruit anyone or satisfy any of the other factors necessary for the enhancement. The district court found that the PSR accurately reflected defendants conduct, and supplied sufficient evidence to support the managerial role enhancement. U.S. v. Anderson, __ F.3d __ (6th Cir. Aug. 4, 2015) No. 14-5741.
7th Circuit agrees that former governor’s schemes were “otherwise extensive.” (431) Defendant, the former governor of Illinois, engaged in a variety of improper schemes to profit from his authority to name an Illinois Senator after Barack Obama was elected president. Defendant was convicted of attempted extortion, corrupt solicitation of funds, wire fraud, and lying to federal investigators. The Seventh Circuit upheld an enhancement under § 3B1.1(a) for a leadership role in a scheme that was “otherwise extensive.” This applies whether or not the defendant’s subordinates and associates are criminally culpable. Application Note 3 to § 3B1.1. The numbers involved here substantially exceeded five and qualified as “otherwise extensive.” U.S. v. Blagojevich, __ F.3d __ (7th Cir. July 21, 2015) No. 11-3852.
8th Circuit agrees that defendant held management role in stock fraud. (431) Defendant was convicted of crimes relating to his involvement in promoting and/or selling stock in Petro America, an unregistered company that had no value. The Eighth Circuit ruled that the district court did not clearly err in finding that defendant was a manager or supervisor of the conspiracy. There was substantial evidence that over the course of two years defendant pitched Petro America to thousands of unwitting investors, many of whom purchased stock from defendant’s co-conspirators. Further, defendant negotiated and signed contracts on behalf of Petro America and then publicly claimed via conference calls that these contracts brought billions of dollars to the company. Defendant also participated in closed-door meetings with other Petro America leaders and organized and hosted a cruise for Petro America shareholders. In sum, the record indicated that defendant exercised a high level of decision-making authority over some of the conspiracy’s essential functions and that his tenacious promotion of the company’s stock set up his co-conspirators’ illegal sale of worthless stock to investors. U.S. v. Hawkins, __ F.3d __ (8th Cir. July 29, 2015) No. 13-3335.
9th Circuit upholds organizer increase for lawyer who hired private detective. (431) Defendant, a lawyer, was convicted of interception of wire communications. Defendant hired another defendant, a private investigator, to intercept the wire communications, although the private investigator had engaged in illegal wiretapping before defendant hired him. At sentencing, the district court enhanced defendant’s offense level by two under § 3B1.1(c) because defendant was “an organizer, leader, manager, or supervisor” of criminal activity. The Ninth Circuit held that the district court was not clearly erroneous in imposing this enhancement. U.S. v. Christensen, __ F.3d __ (9th Cir. Aug. 25, 2015) No. 08-50531.
7th Circuit applies leadership increase to defendant who recruited friend and father into scheme. (431) Defendant participated in a tax fraud scheme organized by Fountain, who was an IRS agent. Those schemes involved filing false tax returns that claimed refunds pursuant to specific provisions of the tax code. Fountain enlisted various people, including defendant, to recruit claimants who would provide their personal information in exchange for a portion of a cash refund. The Seventh Circuit upheld a §3B1.1(a) leadership enhancement. Defendant recruited his father and a friend named Andre Bruce to participate in the schemes, and defendant’s father eventually became a recruiter for defendant and withdrew money for him after the IRS issued refunds. Defendant also directed Bruce to destroy evidence while defendant was on pre-trial release. The district court did not clearly err in imposing the leadership enhancement. U.S. v. Fountain, __ F.3d __ (7th Cir. July 9, 2015) No. 14-3103.
7th Circuit finds defendant held leadership role in bank fraud and identity theft scheme. (431) Defendant pled guilty to multiple counts of bank fraud and one count of identity theft. He argued that because he and his co-defendant, Jackson, were equally culpable in the offense, it was inappropriate for the district court to impose a four-level organizer/leader enhancement on him, while only imposing a three-level manager/supervisor increase on Jackson. The Seventh Circuit found no error, because defendant mischaracterized the record. Although defendant and Jackson committed similar conduct, the district court found that defendant acted as more of a leader than Jackson in light of defendant’s more active recruitment and interaction with writers. Second, defendant’s conduct qualified for the enhancement in its own right: Defendant interacted with and directed writers; defendant recruited all but two of the writers; defendant trained the writers; defendant chose which account holders and banks to target; and defendant provided his writers with the fake identification documents needed to access accounts. Finally, defendant’s argument seemed to suggest that there could only be a single leader in a scheme, which was untrue. U.S. v. Jones, __ F.3d __ (7th Cir. July 9, 2015) No. 14-3103.
7th Circuit agrees that defendant was manager or supervisor in identity theft scheme. (431) Defendant was involved in a conspiracy to commit account takeover fraud, in which he and seven co-conspirators fraudulently added themselves as authorized users on existing credit card accounts without the account holders’ knowledge or permission. The Seventh Circuit found the district court had a sufficient factual basis to apply a three-level increase based on defendant’s role as a manager or supervisor in the conspiracy. The district court credited testimony from co-defendants who testified that defendant recruited them into the scheme and that they took their instruction and direction from him. They also testified that defendant would accompany them to the Bureau of Motor vehicles to help them obtain fraudulent identification, which was corroborated by videotape on at least one occasion. Additionally, defendant made travel arrangements for the co-conspirators in furtherance of the fraud on multiple occasions. U.S. v. Harris, __ F.3d __ (7th Cir. July 1, 2015) No. 14-1846. XE “U.S. v. Harris, __ F.3d __ (7th Cir. July 1, 2015) No. 14-1846.”
8th Circuit agrees that defendant held leadership role in drug organization. (431) Defendant was convicted of drug and money laundering charges. The Eighth Circuit upheld a § 3B1.1(a) leadership enhancement. The trial testimony established that, to facilitate distribution, defendant provided methamphetamine to dealers on credit and recruited others to deliver methamphetamine to dealer Velvick at his apartment. Co-conspirator Maar testified that if Velvick had a problem with the methamphetamine, he and the delivery person would call defendant. Testimony by the four cooperating witnesses established that defendant carefully controlled who was allowed in his house when drugs were sold, and that Hendrix had to establish a personal relationship with defendant before she could go to the house by herself. The district court did not clearly err in finding that defendant was a leader or organizer of the conspiracy. U.S. v. Morris, __ F.3d __ (8th Cir. July 2, 2015) No. 14-2406. XE “U.S. v. Morris, __ F.3d __ (8th Cir. July 2, 2015) No. 14-2406.”
10th Circuit rules court made adequate findings to support managerial enhancement. (431) Defendant was convicted of charges arising from a mortgage fraud scheme. The district court found, over defendant’s objection, that he held a managerial or supervisorial role in the conspiracy. The Tenth Circuit held that the district court made adequate findings to support the enhancement. While the court’s specific factual findings are admittedly sparse, the findings were not so deficient as to hinder appellate review. Significantly, the court ruled on the matter immediately after the prosecutor directed the court’s attention to specific portions of the trial record and the court concluded the “record clearly reflect[ed]” defendant’s role as a manager or supervisor. The record established that defendant recruited others to participate in the mortgage fraud scheme, advised them as to which homes to buy and sell, directed their utilization of the grant programs, and introduced them to co-conspirator Jacoby so he could act as the real estate agent and, in some cases, provide hard-money loans for down payments. These activities sufficiently demonstrated defendant’s role as a manager or supervisor in the mortgage fraud scheme. U.S. v. Zar, __ F.3d __ (10th Cir. June 23, 2015) No. 13-1111.
7th Circuit approves aggravating role enhancement despite lack or coercion or control. (431) Defendant, a former real estate agent, pleaded guilty to bank fraud for his role in a helping prospective real estate buyers assemble fraudulent mortgage loan applications. He challenged a §3B1.1(c) aggravated role adjustment, asserting that the information in his PSR, which stated that he organized the offense by obtaining false documents and referring buyers to loan officers, did not establish the type of coercion or control required by U.S. v. Weaver, 716 F.3d 439 (7th Cir. 2013). The Seventh Circuit disagreed with defendant’s reading of Weaver. Weaver did not require a finding of control and coercion to apply the aggravated role enhancement; that was just one measure. In addition to exercising control, a defendant can have an aggravating role if he was “responsible for organizing others for the purpose of carrying out the crime.” Defendant’s conduct qualified under this alternative standard. He referred buyers to co-defendants Chism and Ware, sometimes paid Ware, and provided these loan officers with the fake documents used in the loan applications. This evidence showed that defendant “influence[d] the criminal activity by coordinating its members.” U.S. v. Dade, __ F.3d __ (7th Cir. June 3, 2015) No. 14-2072.
3rd Circuit relies on co-conspirators’ testimony that defendant was organizer or leader of fraud scheme. (431) Defendant was convicted of Medicare fraud based on a scheme to submit reimbursement claims for patients who did not qualify for hospice care. The Third Circuit held that the district court did not err in applying a four-level enhancement under §3B1.1(a) based on defendant’s role as an organizer or leader of the fraudulent activity. Although defendant challenged the credibility of his co-conspirators, who gave “damning testimony,” the panel declined defendant’s invitation to reweigh the evidence or reassess the witnesses’ credibility. Defendant’s co-conspirators repeatedly testified at trial that defendant was intimately involved in directing the fraudulent scheme. Although the jury could have chosen to reject the co-conspirator’s testimony and believe defendant’s version of events, it did not. The district court’s finding that defendant was an organizer or leader of the fraudulent activity was in line with the jury’s verdict, and defendant pointed to nothing in the record that would make the court’s finding clearly erroneous. U.S. v. Kolodesh, __ F.3d __ (3d Cir. May 28, 2015) No. 14-2904.
11th Circuit agrees that defendant held supervisory role in sex trafficking scheme. (431)Defendant pled guilty to conspiracy to engage in sex trafficking of minors in violation of 18 U.S.C. §1594(c). The Eleventh Circuit ruled that the district court’s finding that defendant exercised a supervisory role in the criminal scheme was not clearly erroneous. Defendant actively recruited Saintvil and his wife to aid him in his criminal scheme, paying them for the services they rendered. Defendant arranged transportation for the young girls to meet clients, set the prices they were to charge, and kept the majority of the illegal gains for himself. He also took the lewd photographs Mrs. Saintvil posted online at defendant’s direction. U.S. v. Hill, __ F.3d __ (11th Cir. Apr. 17, 2015) No. 14-13383.
1st Circuit agrees that defendant held leadership role in drug conspiracy. (431) The district court applied a four-level role in the offense enhancement under §3B1.1(a), finding that defendant was a leader of a drug conspiracy, and that the conspiracy involved five or more participants. The First Circuit affirmed. The district court identified five conspirators who were involved with an intercepted shipment of drugs to Iowa, as well as additional unnamed suppliers and retailers who had to be involved in this planned distribution. The court did not err in finding that defendant had a leadership role in the conspiracy. It pointed specifically to defendant’s role in organizing the activities of the conspiracy, and his role in the conspiracy’s hierarchy above Diaz, a co-conspirator the court described as having “stood over the actual distributors.” U.S. v. Razo, __ F.3d __ (1st Cir. Apr. 1, 2015) No. 13-2176.
11th Circuit agrees that CEO of health care center was leader of Medicare fraud conspiracy. (431) Defendant, the CEO of a health care center, participated in a complex and sustained scheme of Medicare fraud. The Eleventh Circuit held that the district court did not clearly err in finding that defendant was an organizer or leader of the health care fraud conspiracy. Defendant incorporated the health care center and was its CEO. He served as the center’s primary contact with Medicare for purposes of provider certification. He paid kickbacks to patient recruiters, directed recruiters to create fraudulent invoices, and instructed recruiters to recruit Haitian patients who were not eligible for treatment. He also incorporated numerous other business entities in Florida and opened multiple bank accounts through which he moved the proceeds of the health care fraud. Based on the voluminous record from the seven-week trial, the district court did not err by applying the four-level upward increase for defendant’s role in the offense. U.S. v. Moran, __ F.3d __ (11th Cir. Feb. 17, 2015) No. 12-16056.
11th Circuit finds defendant was manager of scheme involving five or more participants. (431) Defendant, who worked as the director of Telecom, a telecommunications company, participated in two scheme in which international companies gave him bribes in exchange for favors from the company. He was convicted of multiple counts of money laundering. The Eleventh Circuit upheld a three-level enhancement under §3B1.1(b) for being a manager of criminal activity that involved five or more participants. Defendant’s argument that Grandison was not a “willful criminal participant” failed. Grandison was the president of Telecom and sole signatory on its bank account, yet she was unable to answer a tax preparer’s basic questions about the expenses of Telecom. Grandison also signed a fraudulent commission agreement on behalf of Telecom; received and deposited checks containing false memos; and disbursed funds to defendant through withdrawals under $10,000. This evidence was sufficient to prove that Grandison knew that the money was the proceeds of unlawful activity. Because there were at least five participants in each scheme, and defendant managed one of them, the enhancement was proper. U.S. v. Duperval, __ F.3d __ (11th Cir. Feb. 9, 2015) No. 12-13009.
7th Circuit affirms leadership increase in mortgage fraud scheme. (431) Defendant, who worked for several mortgage brokers, processed bogus applications for mortgage loans and caused $1.4 million in losses to the lenders. He challenged a § 3B1.1 leadership enhancement. He admitted being an “active and even an enthusiastic participant in the mortgage fraud,” but insisted that his “co-defendants” were freelancers and not under his control. The Seventh Circuit termed this argument “preposterous.” Defendant admitted processing the applications for the 65 fraudulent mortgage loans listed in the plea agreement. He told Young what phony documents he wanted and what specific information to include in those documents. He recruited Persaud and told her what valuations to use in her inflated appraisals. He instructed McMahan to bring particular documents to a loan closing and to fax him documents to prepare loans. And he recruited and paid at least five “bird dogs” to find “buyers” for fraudulent loans. This was more than enough for the court to conclude that defendant “had direction and control during the pertinent transactions over what the others did.” U.S. v. Haywood, __ F.3d __ (7th Cir. Jan. 26, 2015) No. 13-3815.
11th Circuit agrees that defendant held managerial role in “otherwise extensive” health care fraud. (431) Defendant and his partner Leon operated Discovery Therapy, a licensed Medicare provider. He was convicted of health care fraud and related charges. The Eleventh Circuit upheld a § 3B1.1(b) enhancement for being a manager of an offense that was otherwise extensive. Leon and defendant were partners, and defendant ran Discovery when Leon was not there. Defendant split the proceeds of the fraud with Leon. Defendant was an investor in Discovery, a signatory on Discovery’s bank account for 75 days, had some decision-making authority and control over Discovery’s finances, and wrote checks to Martinez to compensate him for his role in the fraud. The fraud was “otherwise extensive.” Defendant, Leon and Martinez actively participated and profited from the fraud. In addition, Discovery paid at least a dozen patients to come to the clinic and receive “services” as part of the fraud. Discovery used an outside billing company to submit more than $1 million in false Medicare claims in just over three months. The scheme also involved the recruitment of patients, the falsification of medical records, and defendant and Leon receiving tens of thousands of dollars from the fraud. U.S. v. Sosa, __ F.3d __ (11th Cir. Feb. 2, 2015) No. 13-13171.
5th Circuit upholds managerial enhancement. (431) Defendant was convicted of drug charges based on his role a conspiracy to import crystal methamphetamine into the United States from Mexico. In U.S. v. Delgado, 672 F.3d 320 (5th Cir. 2012) (en banc), the en banc court construed Note 2 to § 3B1.1 to permit an aggravating role adjustment, even where a defendant did not exercise control over another participant, if he exercised management responsibility over the property, assets, or activities of a criminal organization. The Fifth Circuit upheld the district court’s finding that defendant exercised management responsibility over the property, assets, or activities of the criminal organization. Defendant assisted in negotiations, contributed eight kilograms of jointly-owned crystal meth, stored and packaged the drugs, delivered them to the undercover officer, and indicated a willingness to supply more drugs in the future. Based on this evidence, the district court could plausibly determine that defendant “exercised management responsibility over the property, assets, or activities of a criminal organization.” U.S. v. Ochoa-Gomez, __ F.3d __ (5th Cir. Jan. 28, 2015) No. 13-41258.
2nd Circuit agrees that fraudulent investment scheme involved five participants. (431) Defendant was convicted of charges in connection with a fraudulent investment program. The Second Circuit upheld a §3B1.1(a) leadership enhancement, concluding that the activity involved five or more participants. Two of the participants, Bowen and Dodakian, were convicted of conspiring to commit wire fraud with defendant. Billingsley was a major solicitor for defendant and it was at Billingsley’s suggestion that defendant gave investors promissory notes. Defendant testified that Henshaw helped him keep the investment program in operation after the bank closed his account. Henshaw allowed investors to wire money into her bank account, and she transferred the money out as instructed by defendant. Given the evidence as to Bowen, Dodakian, Billingsley, and Henshaw, the court did not err in finding that, including defendant, there were five participants in his crime. U.S. v. Norman, __ F.3d __ (2d Cir. Jan. 9, 2015) No. 13-2840.
6th Circuit agrees that defendant held leadership role in drug conspiracy. (431) Defendant was arrested short-ly after the failure of a massive drug sale to an under-cover officer. Defendant allegedly played a leadership role in the attempted sale, coordinating the delivery of methamphetamine to his co-conspirators and personally travelling from Kansas City to Michigan to ensure the transaction would go forward. The Sixth Circuit held that the district court did not err in imposing the leadership enhancement under § 3B1.1(a). Co-conspirator Jeannin testified that defendant provided the car that the conspirators used to transport the meth; that only defendant had connections in Arizona where the meth was sourced; and that he arranged (through Jeannin) for drivers to bring meth from there. Co-conspirator Garcia testified that he received a text message from defendant giving him directions to the location where he received drugs to sell to the undercover officer. And when Garcia pulled out of the transaction with the undercover officer, defendant travel-led to Michigan to facilitate the deal. These facts strongly suggested that defendant played a leadership role. U.S. v. Sierra-Villegas, __ F.3d __ (6th Cir. Dec. 23, 2014) No. 13-2513.
8th Circuit agrees that defendant supervised co-conspirators in meth conspiracy. (431) Defendant pled guilty to conspiracy to distribute 500 grams or more of a mixture containing methamphetamine, in violation of 21 U.S.C. §§ 841(a), 846. He argued that the district court erred when it concluded that he was a manager or supervisor in a conspiracy involving five or more participants, contending that that he did not supervise anyone in the conspiracy, but merely followed the orders of his superiors in Phoenix and Lincoln. The Eighth Circuit disagreed. There was substantial testimony at the sentencing hearing indicating that defendant instructed persons delivering drugs from Phoenix where to drop off the drugs and that he paid them for their services. Defendant also helped to provide at least two vehicles that were used to transport drugs from Phoenix to Lincoln, and the record indicated that he instructed a co-conspirator to register and insure the vehicles in the co-conspirator’s name. U.S. v. Garcia, __ F.3d __ (8th Cir. Dec. 17, 2014) No. 14-1530.
11th Circuit finds defendant was manager of fraudulent tax return scheme. (431) Defendant participated in a scheme involving the unauthorized use of personal identifying information to claim fraudulent tax refunds, which were deposited onto debit cards opened in the names of identity theft victims. He challenged a § 3B1.1 supervisory role enhancement, contending that he was merely a middleman and did not engage in the recruitment of individuals to the conspiracy. The Eleventh Circuit affirmed, finding defendant acted as a manager. Defendant received names and social security numbers from co-conspirators for the purpose of submitting fraudulent returns. He also recruited other unindicted co-conspirators to obtain addresses of residences where the debit cards could be received. Further, defendant was deeply involved in the conspiracy. He sent and received victims’ personal identification information used to file the fraudulent tax returns as well as debit card account numbers that were to be used for receiving the victims’ tax refunds. Many of the fraudulent tax returns were also submitted from an IP address registered in defendant’s name. Finally, defendant made numerous withdrawals of the distributed returns with the debit cards. U.S. v. Baldwin, __ F.3d __ (11th Cir. Dec. 17, 2014) No. 13-12973.
1st Circuit agrees defendant held leadership role in drug conspiracy. (431) Defendant was one of four defendants convicted of drug and firearms conspiracy charges. He challenged a leadership enhancement, arguing that the testimony at trial showed that co-conspirator Mendez was the leader of the conspiracy. The First Circuit found no error, because there can be more than one leader of a conspiracy. The trial evidence revealed that in addition to leading a team that sold crack from a housing project, defendant led various conspiracy members in plans to murder other dealers. The district court found that the evidence “clearly established” that five or more people participated in the conspiracy; that defendant was one of the key players in the conspiracy; that he helped plan four murders in furtherance of the conspiracy; and that he, “along with other codefendants, engaged in virulent conduct to eliminate competition … and to protect their own drug trafficking activities.” The leadership enhancement was not clearly erroneous. U.S. v. Rodriguez-Reyes, 714 F.3d 1 (1st Cir. 2013).
1st Circuit holds that “participant” can be immunized witness against a defendant. (431) Defendant was a pimp who, over several years, prostituted young women, including minors. The district court imposed a two-level organizer or leader enhancement under § 3B1.1(c). Trial evidence established that defendant had a prostitute collect money from his other prostitutes, drive around his other prostitutes and inform him when a prostitute had misbehaved. Defendant argued that the prostitutes he employed could not be “participants” within the meaning of section 3B1.1(c) because they received immunity from prosecution, which prevented them from being criminally responsible for the offenses of conviction. The First Circuit disagreed, holding that a “participant” can be an immunized witness against the defendant. The Guidelines’ commentary notes that a “participant” need not be convicted of the offense. The plain language of the guideline makes clear that a participant can be unindicted. U.S. v. Tavares, 705 F.3d 4 (1st Cir. 2013).
1st Circuit agrees that defendant was leader in mortgage fraud scheme. (431) Defendant, a real estate attorney who had been suspended from the practice of law, and co-conspirator Lindley, another attorney, devised and executed a mortgage fraud scheme. The First Circuit upheld a four-level leadership increase under § 3B1.1(a), finding the evidence showed that defendant masterminded the scheme. Defendant inducted Lindley into the scheme and largely guided his actions. Defendant also directed the flow of the scheme’s proceeds from Lindley’s trust account to the conspirators, usually via his own bank accounts, and dictated who was authorized to discuss the scheme with whom. As a result, even if others, too, had supervisory roles, the district court did not clearly err in determining that defendant was an organizer or leader. U.S. v. Appolon, 695 F.3d 44 (1st Cir. 2012).
1st Circuit holds police supervisor held managerial role in drug-planting scheme. (431) Defendant was part of a group of police officers convicted of fabricating criminal cases against citizens by planting drugs on them. The drugs used by the officers were stored in a metal black box in the custody of defendant, a supervisor in the police division. The First Circuit found that the evidence supported a three-level § 3B1.1 managerial role enhancement. Defendant’s official position was supervisor in the division. He maintained the black box and distributed the drugs to the other officers before search operations. When he was out of town, he transferred the box to another officer, so that officer could provide drugs to the others in defendant’s absence. During a variety of searches, defendant issued instructions as to the planting of drugs. The district court did not err in finding that defendant “exercised authority or control over another participant on [at least] one occasion.” U.S. v. Cortes-Caban, 691 F.3d 1 (1st Cir. 2012).
1st Circuit finds defendant was manager in credit card fraud scheme. (431) Defendant was convicted of charges stemming from his participation in a substantial credit card fraud scheme. The First Circuit upheld a § 3B1.1 managerial role enhancement. Defendant was primarily responsible for recruiting co-defendant Regnetta into the conspiracy. Defendant’s contention that Regnetta practically begged to participate, and therefore that he did not actively “recruit” Regnetta, did not matter. For purposes of § 3B1.1, recruitment is not about the intensity or direction of pursuit, but the demonstration of individual authority necessary to bring a new member into the fold. There was also ample evidence that defendant (1) controlled the flow of information to his Boston-based associates, (2) instructed Regnetta, on at least one occasion, exactly what to do when they arrived at an Arkansas racetrack, and (3) dictated the distribution of false identifications to the other members of the conspiracy. Even if Savarese, and not defendant, was the true kingpin of the conspiracy, the record supported the inference that defendant exercised a managerial role in the conspiracy. U.S. v. Savarese, 686 F.3d 1 (1st Cir. 2012).
1st Circuit holds that owner of supermarket chain had leadership role in food stamps scam. (431) Defendant operated an illegal scheme in which the supermarkets he owned and operated provided cash for food stamps. He was convicted of conspiracy to commit food stamp fraud and money laundering. The First Circuit upheld the application of the § 3B1.1(a) four-level enhancement for being an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive. Defendant clearly exercised a supervisory role over the conspiracy, even though store managers were in charge of the day-to-day operations of the stores. Defendant was the president, owner, and sole shareholder of the two corporations that owned the three supermarkets. He certified the supermarkets as NAP-establishments and provided the extensive documentation required. Defendant received regular reports from the managers as to the sales, deposits, and other financial business occurring at the store. Defendant also controlled the finances for the three stores, was the sole signatory of the stores’ bank accounts, and exercised control over each account. He also knew well about the illegal operations. U.S. v. Aguasvivas-Castillo, 668 F.3d 7 (1st Cir. 2012).
1st Circuit holds that defendant need not manage five persons in order to receive three-level enhancement. (431) Defendant received a three-level adjustment under § 3B1.1(b) for being a manager or supervisor of criminal activity involving five or more participants or that was otherwise extensive. Defendant did not contest the lower court’s determination that the conspiracy involved more than five participants or was otherwise extensive. Instead, he challenged the court’s determination that he managed five participants overall. The First Circuit found no error, since the enhancement does not require the defendant to have managed five participants. Section 3B1.1(b) requires only that the defendant manage one other participant in the covered criminal activity. Defendant did not deny that he managed at least one other participant. U.S. v. Garcia-Hernandez, 659 F.3d 108 (1st Cir. 2011).
1st Circuit finds conflicting evidence supported leadership increase. (431) Defendant challenged the district court’s imposition of a § 3B1.1(a) leadership enhancement. Although the record did not present “a perfectly clear picture of the relationship between defendant” and co-conspirator Lassalle, the First Circuit nonetheless found sufficient evidence to support the enhancement. Much of the evidence suggested that defendant and Lassalle were partners. Notably, Lassalle told an undercover officer that neither he nor defendant was authorized to speak without the other’s approval, that his profit was less because he had to “pay all the guys” and that he recently had to fire an employee. However, the evidence did suggest that on at least some occasions, defendant exercised some degree of leadership or organizational control over Lassalle and others. After negotiating with the undercover officer, defendant arranged for Lassalle to deliver money to compensate the agent for damage to his boat, and for Lassalle to deliver the coordinates of a drug transfer point to the agent. At one point, defendant told the agent that “his” system would not work without Lassalle’s cooperation. This was sufficient to satisfy § 3B1.1(a)’s status requirement. U.S. v. Carrero-Hernandez, 643 F.3d 344 (1st Cir. 2011).
1st Circuit holds that FSA fraud scheme involved five or more participants. (431) Defendant and his wife were Farm Service Agency employees who resided in Puerto Rico when Hurricane Georges struck the island. They were convicted of defrauding the FSA in connection with emergency loans and incentives available to qualified farmers following the hurricane. The First Circuit affirmed a four-level leadership enhancement, rejecting defendant’s claim that there were only four participants in the scheme. Defendant recruited 20 cattlemen in Puerto Rico who testified that defendant participated in inflating their damages and instructed them to obtain falsified estimates. Defendant also directed his wife to falsify the loan applications submitted by the cattlemen. Furthermore, defendant bribed the FSA Program Director for the required FSA authorization for loans over $300,000. U.S. v. Alfonzo-Reyes, 592 F.3d 280 (1st Cir. 2010).
1st Circuit upholds leadership increase despite court’s failure to specifically identify persons led. (431) Defendant argued that the evidence did not support a finding that he was an organizer, leader, manager or supervisor of others in the offense. The First Circuit upheld the enhancement, even though the district court did not make a specific finding identifying one or more persons whom defendant organized or led. The PSR stated that defendant used two or three individuals to sell his crack cocaine, and that fact was included in the government’s recitation at the change-of-plea hearing of the facts it would prove if the case went to trial. Defendant indicated his agreement with the government’s version of the facts. U.S. v. Zayas, 568 F.3d 43 (1st Cir. 2009).
1st Circuit finds defendant led overall activity involving drugs and firearms. (431) During the time that defendant trafficked in powder and crack cocaine, he collected a number of firearms. He was convicted of multiple drug and firearms charges. The district court increased the sentence by four levels under § 3B1.1(a) based on its conclusion that defendant was a “leader or organizer” of criminal activity involving five or more participants or was otherwise extensive. The First Circuit rejected defendant’s claim that he was involved in four separate clusters of criminal activity, rather than a single criminal activity that involved five or more participants or was otherwise extensive. There was “significant evidence of cross-pollination” between defendant’s drug and firearms dealings. On at least two occasions, defendant paid others with drugs to acquire firearms for him. In addition, defendant traded those firearms for drugs. The panel also rejected defendant’s argument that the increase was improper because he did not lead five or more individuals. A defendant needs only to have led or organized one criminal participant to qualify as a leader or organizer. U.S. v. Arbour, 559 F.3d 50 (1st Cir. 2009).
1st Circuit upholds managerial increase for boat “captain” who gave instructions and determined when boat would land. (431) Defendant was a crew member on a 40-foot boat carrying 92 aliens that capsized off the coast of Puerto Rico. Seven passengers did not survive. He was convicted of alien smuggling charges. The First Circuit upheld a three-level increase based on defendant’s role as a manager or supervisor of the smuggling operation. Defendant used a cell phone and was overheard discussing logistics of the operation with another participant; he was also identified as the captain who gave instructions to other participants and determined whether and when the boat would be brought to shore. U.S. v. Hilario-Hilario, 529 F.3d 65 (1st Cir. 2008).
1st Circuit says jury finding is not required for leadership increase. (431) Defendant argued that no jury verdict established that he was an organizer or leader of a criminal activity that involved five or more participants, and therefore, a § 3B1.1(a) enhancement was improper. However, as the First Circuit noted, there is no requirement that the jury find that the leadership enhancement applies. The court’s application of the enhancement here was not clearly erroneous. There was testimony that a number of different people assisted defendant with his drug operations; that defendant made wholesale drug sales to gangs, as well as retail sales at bars in and around the city; that defendant’s business involved significant quantities of drugs; and that it extended over a period of at least three years. U.S. v. Pierre, 484 F.3d 75 (1st Cir. 2007).
1st Circuit holds that court properly concluded defendants had common money laundering conspiracy. (431) Defendants challenged a § 3B1.1(a) leadership increase, arguing that the evidence was insufficient for the court to conclude that there was an overarching conspiracy to launder money involving five or more people. At most, they contended that the evidence showed that they led their own separate conspiracy, neither of which contained a five-person minimum. The First Circuit disagreed, finding sufficient evidence to support the enhancement. There was testimony that defendants were partners in a drug distribution ring, including testimony that one defendant introduced the other as his “drug associate.” The ring generated significant sums of cash which provided the defendants with a common motive to launder money. There was also substantial testimonial and documentary proof of overlap among conspiracy participants, including money being wired to common recipients. The district court properly concluded that the overlap in method and participants was not a coincidence, but evidence of an agreement between defendants to launder the money that they obtained from their drug conspiracy. U.S. v. Monteiro, 417 F.3d 208 (1st Cir. 2005).
1st Circuit holds that defendant was leader even though he was subordinate to another participant. (431) Defendant was convicted of charges based on his participation in a drug smuggling organization. The First Circuit affirmed a § 3B1.1(a) leadership increase, ruling that the mere fact that defendant was subordinate to another participant did not establish, without more, that defendant was not an organizer or leader of the conspiracy. Numerous witnesses testified that defendant was the leader of the group in Miami. The evidence indicated that defendant recruited others to assist in smuggling cocaine past customs officials. He coordinated the efforts of both recruits, telling them where and when to pick up the drugs and to whom it should be delivered. He then paid them thousands of dollars for their assistance. Defendant also led several member of the organization in a coordinated effort to purchase firearms in Miami. U.S. v. Casas, 356 F.3d 104 (1st Cir. 2004).
1st Circuit says extensiveness requirement can be met by relevant conduct. (431) Defendant received a four-level increase under § 3B1.1(a) increase for being an “organizer or a leader of a criminal activity that involved five or more participants or was otherwise extensive.” While conceding that a court may look to all relevant conduct when determining if a defendant is a leader or organizer of criminal activity, defendant argued that the “five or more participants” and “otherwise extensive” elements related solely to the offenses of conviction. The First Circuit disagreed. The extensiveness requirement depends on “the totality of the circumstances, including … the width, breadth, scope, complexity, and duration of the scheme.” The extensiveness requirement can be met by the relevant conduct surrounding the offense of conviction. The relevant conduct surrounding defendant’s heroin sales included “five or more participants” and demonstrated that defendant’s street gang was an “otherwise extensive” organization under § 3B1.1. U.S. v. Laboy, 351 F.3d 578 (1st Cir. 2003).
1st Circuit applies leadership increase even though others had control over other parts of conspiracy. (431) In applying a § 3B1.1(a) leadership increase, the district court found the issue “a fairly easy call.” Evidence showed that defendant directed the activities of at least four co-conspirators, and orchestrated the drug ring, controlled the flow of drugs in its sphere of influence, handled most of the negotiations for amounts and prices, gave orders to the other six conspirators, and oversaw the stash house. Moreover, several of the conspirators identified defendant as the boss. The First Circuit affirmed despite defendant’s claim that he was only one of several management-level dealers. The fact that others might have exercised authority over loosely related drug-trafficking operations did not undercut the court’s finding that defendant was a leader of a discrete part of the operation. U.S. v. Ventura, 353 F.3d 84 (1st Cir. 2003).
1st Circuit holds that defendant was leader of drug conspiracy. (431) Defendant conceded that he was a “key player” and a “manager” in a marijuana conspiracy, but argued that he had a middleman role which should result only in a three-level managerial role increase rather than a four-level leadership role increase. The First Circuit found ample support for the finding that defendant was a leader or organizer of the marijuana conspiracy. Defendant’s role included recruiting participants to the conspiracy as well as straw men in Maine to be used for delivery of the marijuana from Texas. Defendant collected the marijuana from the delivery sites, took it to others, received payment, and divided proceeds among participants. He was personally involved in the collection of drug debts, and typically kept for himself a larger share of the proceeds than anyone except Barbour. When Barbour was arrested, it was defendant who took over the business. At Barbour’s trial, a conspirator identified defendant as the person in charge of the Maine end of the operation. U.S. v. May, 343 F.3d 1 (1st Cir. 2003).
1st Circuit upholds finding that supplier held organizer role in drug organization. (431) Defendant was a wholesale drug dealer. He secured cocaine in bulk on trips to New York, broke down the kilograms into ounces and sold multiple ounces on a regular basis to retail drug dealers. In support of a leadership increase, the government noted that (1) when other drug dealers called defendant for a delivery, he would name a time and place for the transaction, (2) some of the other dealers regarded defendant as the “king,” (3) defendant boasted that he “would shut [a co-defendant] down for good if [the co-defendant] messed up again,” and (4) on at least one occasion defendant arranged for a transfer of drugs that involved defendant as supplier, one of his retailers and an acquaintance of the retailer. While none of these facts were strong support for the increase, the First Circuit nonetheless affirmed it. The district court, who presided over the trial and heard the evidence first hand, said he had no doubt that defendant was the organizer. The trial judge had the advantage over the appellate court as to both the raw facts and the “feel” of the situation. U.S. v. Picanso, 333 F.3d 21 (1st Cir. 2003).
1st Circuit holds that bank fraud scheme was otherwise extensive. (431) Defendant, the president of a bank, was convicted of a variety of fraud charges in connection with his use of bank funds to pay off a personal mortgage. He conceded that he played a leadership role in the scheme, but contended that it did not involve five participants and the criminal activity was not “otherwise extensive” under § 3B1.1(a). Extensive criminal activity derives from “the totality of the circumstances, including not only the number of participants but also the width, breadth, scope, complexity, and duration of the scheme.” The First Circuit held that defendant’s criminal activities satisfied the extensiveness standard in § 3B1.1(a). The judge cited numerous persons involved in the scheme, including four members of an estate who held an interest in the mortgage, a co-defendant, the assistant branch manager, a notary, his spouse, and the vice president of another bank. Moreover, the scheme was complex, involving a number of documents that had to be prepared internally within the bank, various deeds that were prepared externally through a notary, and a number of checks that were issued personally by defendant and then by the bank when he did not have sufficient funds to pay the checks. U.S. v. Colon-Munoz, 318 F.3d 348 (1st Cir. 2003).
1st Circuit holds that defendant exercised authority over co-conspirator who acted as go-between. (431) On several occasions, defendant and Scott sold crack to an undercover agent. Scott acted as the go-between and conducted the prefatory logistical communications with the undercover purchaser. The deals were then completed in Scott’s apartment, enabling defendant to limit his own exposure. Although Scott made a smaller 2.5 gram crack sale to the undercover agent without defendant’s direct involvement, defendant personally completed the sales of more substantial amounts. At all times in the course of these two larger sales, defendant exercised exclusive dominion over the drugs. Defendant also retained the lion’s share of the proceeds, while Scott received only small finder’s fee payments. Based on this information, the First Circuit affirmed a § 3B1.1(b) leadership increase. The court could reasonably conclude that defendant exercised authority over Scott. The district court had before it evidence that defendant supplied the drugs for the conspiracy that bore his alias; that he established a customer base; that Scott acted as a go-between or finder, with defendant personally involving himself in completing the larger sales; that defendant used Scott’s apartment for transactions and as a safe-house; that he exercised dominion over virtually all of the known quantities of drugs; and that he kept the great majority of the proceeds. U.S. v. Brown, 298 F.3d 120 (1st Cir. 2002).
1st Circuit upholds leadership increase for dairy farmer who sold adulterated milk. (431) Defendant was a dairy farmer. On at least five occasions over a seven-month period, defendant, together with delivery truck drivers, participated in a scheme to add water and salt to the milk produced at his farm. The water was added to increase the amount of milk sold and salt was added to mask the addition of water and avoid detection of the adulterated milk at the processing plant. The district court found that defendant was “the owner of the farm and without his participation there can be no adulterated milk.” The First Circuit ruled that this supported the conclusion that defendant was an organizer or leader of the criminal activity. The district court also properly found that the fraud was “otherwise extensive” because it “allowed [the] unknowing services of many to be utilized in putting this milk in the chain of commerce…. There were chemists, the employees, the milk industry people, who relied on this and unknowingly gave their services in order to put this milk in the chain of commerce.” U.S. v. Lopez-Lopez, 295 F.3d 165 (1st Cir. 2002).
1st Circuit affirms increase where three or four other conspirators identified defendant as leader. (431) The First Circuit found that defendant’s challenge to his § 3B1.1(a) leadership increase was groundless, since three of the four other conspirators, following their arrests, identified defendant as their leader and/or organizer. The enhancement did not violate Apprendi, since it did not result in a sentence that exceeded the lowest applicable statutory maximum. See U.S. v. Caba, 241 F.3d 98 (1st Cir. 2001). U.S. v. Piccolo, 282 F.3d 41 (1st Cir. 2002).
1st Circuit affirms four-level leadership increase for defendant who ran two drug points. (431) Defendant ran at least two separate drug points and supervised the work of at least five other people. He also worked with the conspiracy’s leader in retrieving drug shipments and distributing them among the organization’s other drug points. The First Circuit affirmed a four-level leadership increase under § 3B1.1(a). Although it was a close case as to whether defendant only deserved a three-level increase under § 3B1.1(b) for being a manager or supervisor, it did not much matter. Even with only a three-level increase, his offense level would be 43, which would still subject him to a life term. U.S. v. Martinez-Medina, 279 F.3d 105 (1st Cir. 2002).
1st Circuit holds that defendant held leadership role in fraud scheme. (431) Defendant, a former paralegal, enhanced his income through an extensive array of white collar crimes using the identifies of others. In one scheme, he filed 20 false income tax returns with the IRS for the tax year 1996, seeking tax refunds in the names of at least 20 people. He used four-co-conspirators to carry out the scheme, and the intended loss to the government exceeded $80,000. The First Circuit affirmed a § 3B1.1(a) leadership increase. Defendant had control over the bank account where some of the refund checks were deposited; he was the one who received the rebates on software which most likely were used for the crime; he had the pertinent lists and equipment; and he transported the runners. The district court reasonably inferred from these indicia of control that defendant’s role in the offense was executive rather than merely ministerial. U.S. v. Scott, 270 F.3d 30 (1st Cir. 2001).
1st Circuit agrees that defendant held leadership role in drug gang. (431) The district court found that defendant occupied “the primary role” in his drug gang, and was considered “the undisputed leader” by older and younger members alike. The First Circuit ruled that the evidence clearly supported this finding. Defendant had ultimate decision-making authority in the gang, determined who could sell on gang territory, decided when to take action against rival drug dealers, recruited juvenile accomplices, and supplied the gang with a large quantity of drugs. U.S. v. Patrick, 248 F.3d 11 (1st Cir. 2001).
1st Circuit holds that defendant was leader of counterfeit check scheme. (431) Defendant and others obtained counterfeit payroll checks and counterfeit identification cards in the names of the payees listed on the checks. They cashed hundreds of the checks at various Rhode Island bank branches. The First Circuit affirmed a four-level leadership increase under § 3B1.1(a). The evidence showed that defendant recruited co-defendant Avelar. Moreover, defendant was the only Providence-based defendant, apart from Avelar. It was reasonable to infer that defendant was the one familiar with the Providence area and with the local bank branches, that he was in charge of the operations, and that he instructed the out-of-state defendants about the logistics of the second phase of the operation. Telephone records showed that seven phone calls were placed by out-of-state defendants to defendant’s residence just before the second phase began. It was reasonable to infer that defendant recruited the others, just as he had recruited Avelar. U.S. v. Solares, 236 F.3d 24 (1st Cir. 2000).
1st Circuit holds that defendant was organizer of scheme to conceal assets from bankruptcy court. (431) Defendants concealed from the bankruptcy court their ownership interest in a summer house, which they placed in a close friend’s name in trust. The First Circuit upheld the district court’s finding that that defendant Stein was an organizer, leader, manager or supervisor under § 3B1.1(c). Stein, together with her co-defendant, devised and carried out the plan to conceal the property from bankruptcy creditors. Stein signed a backdated deed of the property, met with the bankruptcy attorney, provided the information for her filing and attended the meetings of creditors. After defendants conveyed title to the friend, both defendants forwarded the tax forms to her. The testimony of defendants’ secretaries reflected that Stein as well as her co-defendant exercised decision-making authority with respect to the property. Both defendants made the arrangements with the real estate broker when the property was being sold. When the proceeds of the sale were issued to the friend, she signed them over to accounts from which Stein benefited. Although there was little evidence that Stein alone directed the friend’s activity, two organizers can jointly direct the activity of another. U.S. v. Stein, 233 F.3d 6 (1st Cir. 2000).
1st Circuit holds that government waived challenge to improper reduction of leadership enhancement. (431) An informant testified that defendant was second in command at the location where his gang distributed drugs. Moreover, defendant arranged with the informant to use her apartment for drug packaging. Because there was evidence that defendant exercised control over at least one other person, the First Circuit affirmed a § 3B1.1(b) managerial role increase. However, although the district court found § 3B1.1(b) applied, it decided to give defendant “a break” and increase his offense level by only two levels rather than three. This was improper. A court may not forgo the three-level increase called for by § 3B1.1(b) and instead impose a two-level increase when it finds mitigating circumstances. However, because the government did not appeal this error, the issue was deemed waived. U.S. v. Gonzalez-Vazquez, 219 F.3d 37 (1st Cir. 2000).
1st Circuit holds that defendant was manager of drug transaction. (431) Police observed a car with five occupants leave a drug transaction. Once the occupants became aware of the police pursuit, the vehicle accelerated, leading to a dangerous high-speed chase through a residential area. In the course of the chase, shots were fired from the back of the speeding car. Eventually, the car was stopped. Police recovered two firearms in the back seat and a bag containing 18 kilograms of cocaine from the trunk. The First Circuit approved a three-level role in the offense increase under § 3B1.1(b). The gang plainly numbered at least five—several witnesses testified without contradiction that five persons occupied the fleeing car. The evidence also supported the finding that defendant was the leader—he owned the drugs, gave orders freely, and was prepared to use extreme measures if anything went awry. U.S. v. Alicea, 205 F.3d 480 (1st Cir. 2000).
1st Circuit holds that defendant was leader of alien smuggling conspiracy. (431) Defendant conspired to smuggle Chinese nationals into the US in a ship. Operating out of the US, defendant arranged for undercover agents posing as fishermen to transport the aliens during the final leg of their journey. The First Circuit ruled that defendant held a leadership role in the smuggling conspiracy. Defendant inspected and approved of the agents’ boat during negotiations, agreed to pay the agents $500,000 for use of the boat, did “most of the talking” during price negotiations, and gave the agents $30,000 as a deposit. This evidence was sufficient to demonstrate that defendant was in charge of the stateside portion of the venture, which supported a finding that he was a leader or organizer of the criminal activity. Moreover, defendant’s sentence was not affected by this enhancement, since even without it he was subject to a mandatory minimum 36-month sentence. U.S. v. Li, 206 F.3d 78 (1st Cir. 2000).
1st Circuit includes minors as participants for leadership role purposes. (431) The evidence before the district court plainly demonstrated that there were eight criminally responsible participants in addition to defendant. The First Circuit found defendant’s contention that minors should not be considered “participants” under § 3B1.1 to be “utterly without merit.” U.S. v. Rivera-Maldonado, 194 F.3d 224 (1st Cir. 1999).
1st Circuit says enhancement for use of minor not double counting. (431) Section 2D1.2(a)(1) provides for a two-level enhancement for drug offenses “directly involving” minors. Defendant argued that his § 2D1.2(a)(1) enhancement constituted double counting, since the minors involved in the conspiracy already had been counted under § 3A1.1(a) as among the five participants he supervised. The First Circuit found that the cumulative application of § 2D1.2(a)(1) and § 3B1.1(a) did not constitute impermissible double counting. Note 4 to § 1B1.1 says that “[a]bsent an instruction to the contrary, the adjustments from different guideline sections are applied cumulatively (added together).” Nothing in the text or commentary suggests that either § 2D1.2(a)(1) or § 3B1.1(a) may not be applied cumulatively. U.S. v. Rivera-Maldonado, 194 F.3d 224 (1st Cir. 1999).
1st Circuit upholds supervisory role enhancement. (431) Adopting the recommendation in the PSR, the district court applied a three-level enhancement under § 3B1.1(b) for holding a supervisory role over at least five other persons in the drug enterprise. The First Circuit upheld the court’s finding that there were more than five participants in the scheme. The PSR cited five individuals, plus two unidentified Hispanic males. Even if the two unnamed males were the same person or another named member of the conspiracy, there were still five participants remaining. The record was replete with instances of defendant exercising a managerial or supervisory role over the named and unnamed individuals. U.S. v. Cadavid, 192 F.3d 230 (1st Cir. 1999).
1st Circuit applies enhancement based on supervision of spouse. (431) Defendant recruited a large number of unsuspecting couriers to transport large amounts of cocaine, diluted in bottles of alcohol, from Jamaica to the U.S. Defendant challenged a § 3B1.1(b) supervisorial enhancement, arguing that because the couriers were unaware of the drug conspiracy, they were not criminally responsible and thus did not qualify as “participants” under § 3B1.1 The First Circuit upheld the enhancement based on defendant’s supervision of his wife in the drug importation conspiracy. It did not matter that the government did not prosecute or convict the wife for her participation. U.S. v. Bey, 188 F.3d 1 (1st Cir. 1999).
1st Circuit rules defendant was leader of check counterfeiting scheme. (431) Using the names and addresses of people with obsolete checking accounts, defendant created counterfeit checks and driver’s licenses with equipment located in his home. He and three co-conspirators repeatedly purchased merchandise with the counterfeit checks, and then returned the goods for cash refunds before the checks bounced. The First Circuit affirmed a § 3B1.1(a) leadership enhancement. Defendant recruited Kiendra, directed him in executing the scheme, and took 50 percent of the revenues from the scheme. The criminal activity was extensive, covering several states and involving hundreds of transactions. Further, defendant organized the scheme from the basement of his home, supervised two other conspirators besides Kiendra in passing the counterfeit checks, and collected 50 percent of their revenues as well, regardless of whether he accompanied them to the stores. U.S. v. Robbio, 186 F.3d 37 (1st Cir. 1999).
1st Circuit holds that two-level increase not available where offense involved more than five participants. (431) At sentencing, defendant acknowledged his involvement as a core member of a conspiracy that distributed vast quantities of drugs from various housing projects. Specifically, he acknowledged working at the “table” at one location and going out “hunting for people to kill” during a drug war with other dealers. Defendant’s candor so impressed the judge that he received a three-level reduction for acceptance of responsibility. Defendant argued that the government retaliated by seeking a three-level, as opposed to two-level, adjustment for his role in the offense. The First Circuit held that because defendant’s conduct clearly involved five or more participants, he was not eligible for the mere two-level adjustment under § 3B1.1(c). U.S. v. Candelaria-Silva, 166 F.3d 19 (1st Cir. 1999).
1st Circuit says specific findings on supervisory role unnecessary. (431) Defendant argued that the court did not make specific findings to support a two-level supervisorial enhancement. The First Circuit held that such findings were unnecessary since the record clearly reflected the basis of the court’s determination. The government presented two witnesses at trial who testified that defendant was in charge of one of the conspiracy’s drug points. U.S. v. Marrero-Ortiz, 160 F.3d 768 (1st Cir. 1998).
1st Circuit upholds managerial role for giving addresses for shipments and recruiting receivers. (431) Defendant was involved in a conspiracy that shipped marijuana from San Diego to Massachusetts. The First Circuit affirmed a three-level enhancement for being the manager of a scheme involving at least five participants. Defendant supplied addresses to the San Diego sellers, recruited others as receivers for the falsely addressed packages, and supervised their efforts. Moreover, because the court upheld the managerial role enhancement, defendant’s participation in the offense was not substantially less culpable than the average participant. U.S. v. Conley, 156 F.3d 78 (1st Cir. 1998).
1st Circuit finds defendant had leadership role in advance fee loan scam. (431) Defendant and an associate ran a fraud scheme that solicited borrowers to pay “advance fees” for loan transactions that they never intended to consummate. Defendant challenged a § 3B1.1(a) leadership enhancement contending that he was at most an equal partner in the conspiracy with his associate, who did not receive a role-based increase. The First Circuit found ample evidence to support the leadership enhancement. Defendant formed the company, rented office space for its operations, and invited the associate to join him in the fraudulent advance scheme. In addition, defendant directed the meetings with the victims and explained the loan program to them. Defendant held himself out as the president of the company and represented that he controlled the board of directors. Even if the associate’s role in the advance fee scheme was commensurate with defendant’s, this was not sufficient to bar the enhancement. A perceived need to equalize sentencing outcomes for similarly situated co-defendants, without more, does not justify a departure. The enhancement, when combined with a more than minimal planning enhancement, did not constitute impermissible double counting. U.S. v. Kneeland, 148 F.3d 6 (1st Cir. 1998).
1st Circuit departs upward for supervisory authority over juvenile’s prostitution activities. (431) Defendant, a partner in a prostitution business, was herself a prostitute. She was convicted of transporting minors across state lines for prostitution purposes. The judge recognized that a § 3B1.1 aggravating role enhancement did not apply because none of the other prostitutes were “participants” in the transportation offense. However, the judge departed upward by two levels based on comment 2 to § 3B1.1, which allows departures for a defendant who exercised management responsibility over the property, assets or activities of a criminal organization. The First Circuit affirmed the departure based on defendant’s exercise of supervisory or management responsibility over one particular juvenile’s prostitution activities. The juvenile testified that defendant instructed her how to act, what casino to go to, what to do in casinos to attract dates and how to get them. The juvenile also testified that just before being sent on the trip, she told defendant that she was sick, but defendant told her she had to bring some money home. Although there were some inconsistencies in the juvenile’s testimony, credibility determinations lie within the district court’s domain. U.S. v. Anderson, 139 F.3d 291 (1st Cir. 1998).
1st Circuit rules that prostitution ring was otherwise extensive. (431) Defendant and his partner operated a prostitution business that involved both juvenile and adult women. He was convicted of transporting minors and other individuals across state lines for prostitution purposes. The First Circuit ruled that the prostitution ring was an “otherwise extensive” criminal activity. A significant number of women were under defendant’s control. One witness testified at sentencing that the number was eight. Defendant used the services of several other individuals in two states and his plans involved, at a minimum, transporting women for prostitution in three states. U.S. v. Anderson, 139 F.3d 291 (1st Cir. 1998).
1st Circuit affirms defendant’s leadership role in heroin conspiracy. (431) Defendant was convicted of conspiracy to possess and distribute heroin. The First Circuit found the evidence sufficient to support an organizer or leadership enhancement. Defendant was always the person contacted when heroin was to be purchased and he always returned pager calls. He set prices and determined the location of the transactions. Witnesses testified that it appeared that the men who accompanied defendant were his subordinates and that he hired the person to run the conspiracy’s heroin “store” from 9 am to 6 pm daily. U.S. v. Berrios, 132 F.3d 834 (1st Cir. 1998).
1st Circuit says man who assisted in devising home invasion scheme was participant. (431) Defendant received a § 3B1.1(a) enhancement for being the leader of criminal activity involving five or more participants. He argued that the home invasion and robbery did not involve five participants. The First Circuit held that a man who assisted in devising the scheme was a participant, even though he did not actually participate in the robbery. This man helped target the victim’s home for the commission of the robbery, provided the home in which the planning meeting took place, participated in the planning meeting with the four robbery perpetrators, and advised against the necessity of weapons to gain entry into the victim’s home. U.S. v. Fosher, 124 F.3d 52 (1st Cir. 1997).
1st Circuit, on rehearing en banc, affirms role in the offense enhancement. (431) Defendant and others sold drugs and firearms from his restaurant. The district court found that defendant was an organizer or leader because defendant’s 14-year old pregnant girlfriend delivered drugs to an undercover agent, and others making sales were observed conferring with defendant before the transactions. On rehearing en banc, the Fourth Circuit found that the evidence supported the aggravated role enhancement. The record suggested that defendant was at the center of a well-organized series of drug and weapon sales, conducted at or through the restaurant that he owned and operated. Defendant involved various individuals not only as facilitators but also as go-betweens in an effort to limit his own apparent involvement. This pattern is common in many sophisticated but illegal transactions. Defendant’s supervision of his 14-year old girlfriend would support the enhancement. Although the issue was close, a fact-finder choice between two plausible inferences cannot be clearly erroneous. U.S. v. Cruz, 120 F.3d 1 (1st Cir. 1997) (en banc).
1st Circuit rules that loan fraud scheme was “otherwise extensive.” (431) Defendant fraudulently obtained a loan to purchase a warehouse by inflating the purchase price of the property. He also submitted falsified rental agreements for supposed tenants of the property, and forged other tenants’ names on documents attesting to the accuracy of the information he supplied to the bank. He then fraudulently obtained a second loan with several others by forging the signatures of the men’s wives on a loan guarantee. The First Circuit held that the fraud scheme was “otherwise extensive under § 3B1.1(a). Defendant’s criminal activity involved a fraud against two financial institutions involving loans totaling $8.1 million. He forged and falsified numerous documents, conspired with one man to falsify the sale price of the property, used the (possibly) unwitting services of four others to obtain the first loan, and the services of four men and their wives to obtain the second. U.S. v. D’Andrea, 107 F.3d 949 (1st Cir. 1997).
1st Circuit affirms role increase where defendant admitted recruiting son. (431) Defendant fraudulently obtained a $160,000 credit union loan to purchase property by representing that the purchase price was $205,000 rather than $120,000. Because of defendant’s bad credit, the loan was actually made to defendant’s son, and defendant’s son held title to the property. The First Circuit affirmed a managerial role enhancement based on defendant’s admission in his response to the PSR that to the extent defendant’s son was involved, “it [was] solely due to [defendant’s] fault and not [the son’s].” U.S. v. Fraza, 106 F.3d 1050 (1st Cir. 1997).
1st Circuit increases for management role in false payroll and tax documents. (431) Defendant was convicted of conspiring to defraud the IRS and filing false income tax returns. The First Circuit affirmed a § 3B1.1(c) enhancement even though others were the leaders of the scheme. Defendant had a management role in connection with false payroll and tax documentation directed to straw employees in the conspiracy. U.S. v. Goldberg, 105 F.3d 770 (1st Cir. 1997).
1st Circuit rules owner of body shop had managerial role in automobile insurance fraud. (431) Defendant and his co‑defendant brother each operated auto body shops in the same city and were involved in an insurance fraud scheme. Co‑conspirators would stage “accidents” between insured vehicles and damaged cars that were already in defendant’s or his brother’s possession. Defendant would then file insurance claims under the insurance policies in order to “repair” the hit car. The two body shops used the same damaged cars to show to different insurance appraisers as the car “hit” by the insured vehicle. The First Circuit agreed that defendant, as owner of one of the body shops, held a managerial role in the fraud scheme. The district court properly relied on evidence of defendant’s direction and control over others. Defendant admitted he directed his sister‑in‑law to bring her car to his shop, tell her insurance company that she had hit a parked car, and that the car she hit was at his brother’s shop. Moreover, defendant engineered a fraudulent claim for another man and owned one of the body shops involved in the fraud. U.S. v. Voccola, 99 F.3d 37 (1st Cir. 1996).
1st Circuit holds that defendant held leadership role in attempted arson of restaurant. (431) Defendant was one of three partners in a restaurant. He attempted to burn down the top of the restaurant to receive insurance proceeds that would finance certain restaurant renovations. The First Circuit agreed that defendant held a leadership role in the attempted arson. Defendant and a restaurant employee who participated in the attempts were not “equals.” It was defendant’s idea to burn the restaurant, defendant devised the time and method of committing the offense, defendant persuaded the employee to participate after failing to hire someone else to commit the offense, and the employee poured the gasoline at defendant’s request. U.S. v. DiSanto, 86 F.3d 1238 (1st Cir. 1996).
1st Circuit agrees that defendant supervised man to burn his club. (431) Defendant ran a private social club that had been ordered closed by the city for violation of city codes. Defendant offered a man who had been working on repairs at the club to set fire to the building. That night, defendant called the club from his car and asked the man whether he would set the fire. The man then set some mattresses in the building on fire and fled. Defendant argued that he did not supervise the man, pointing out that he called the man on the night of the fire and asked him whether he was going to do it. The First Circuit held that defendant supervised the man who burned the club because he initiated discussion of the arson, recruited the man to carry it out, told him specifically how to do it, and promised to pay him. U.S. v. Mitchell, 85 F.3d 800 (1st Cir. 1996).
1st Circuit agrees that defendant played extensive role in investment fraud. (431) Defendant ran a scheme to defraud investors by obtaining their funds through false representations. The First Circuit affirmed a § 3B1.1(a) enhancement for a leadership role in a criminal organization that was “extensive.” Defendant’s company employed over a dozen people; the fraud was sophisticated and directed at many investors and was orchestrated by defendant. Defendant argued that the enhancement required not only that the fraud be extensive but that defendant have played an extensive role as an organizer or leader. The First Circuit agreed, but found the evidence supported the court’s finding that defendant did play an extensive role. The enhancement was not double counting, even though the size of the fraud was reflected in the loss adjustment under § 2F1.1. At worst, this was permissible double counting. U.S. v. Camuti, 78 F.3d 738 (1st Cir. 1996).
1st Circuit agrees that defendant was leader despite his youth. (431) Defendant was convicted of conspiracy to distribute marijuana. He argued that his youth relative to other conspirators indicated that he was at most a “co-equal” rather than a leader. The First Circuit affirmed the § 3B1.1(c) enhancement. Although age can correlate with one’s organizational status, there is little probative value in that correlation. The evidence showed that an older conspirator responded to defendant’s orders, defendant set the timing of the planned transaction, and other conspirators expected a smaller share of the profits. Defendant pointed to no evidence suggesting a non-leadership role, other than his age relative to his co-conspirators. U.S. v. Wihbey, 75 F.3d 761 (1st Cir. 1996).
1st Circuit agrees that developer orchestrated mortgage loan fraud scheme. (431) Defendant made false statements to lenders to obtain loans for buyers in his condominium development. He challenged a § 3B1.1 enhancement, arguing that the government improperly singled him out for prosecution by cutting deals with the real “leaders” of the scheme. The First Circuit affirmed the enhancement. A sentencing court need not compare the responsibilities of all participants before imposing a § 3B1.1 enhancement. The evidence showed that defendant was a sophisticated real estate developer who supplied false purchase prices to his attorney, instructed his attorney and buyers to conceal his false statements, and secreted the documentation containing the actual terms. U.S. v. Gilberg, 75 F.3d 15 (1st Cir. 1996).
1st Circuit finds defendant was leader of extensive gun conspiracy. (431) Defendant conspired to violate federal firearms laws by unlawfully purchasing, possessing and selling handguns. The First Circuit agreed that defendant was the leader or organizer and the conspiracy was “otherwise extensive.” Defendant made the basic decisions about how many guns to purchase and when to buy and sell them. A defendant who “makes the critical strategic and operational decisions” in a group enterprise can be deemed an organizer or a leader. The criminal activity was “otherwise extensive.” The number of guns obtained and sold was substantial; the conspiracy extended over many months; and the arrangements—acquisition from out of state sources, obliterating serial numbers, and distribution—was reasonably elaborate. U.S. v. Twitty, 72 F.3d 228 (1st Cir. 1995).
1st Circuit upholds managerial enhancement for recruiting, supplying, and instructing others to pick up marijuana at sea. (431) Defendant was convicted of conspiring to import marijuana. The First Circuit upheld a § 3B1.1(b) enhancement, holding that recruiting, supplying, and instructing those who are to perform the essential mission of picking up marijuana at sea indicates a managerial role. U.S. v. Belardo-Quinones, 71 F.3d 941 (1st Cir. 1995).
1st Circuit holds that defendant was manager of planned armed robbery. (431) Defendant and five others planned a robbery of an armored truck at a local bank. The First Circuit held that defendant was a manager under § 3B1.1(b) based on defendant’s managerial responsibilities “over the metaphorical assets of the criminal organization,” and his control over others involved in the crime. Defendant badgered a government informant to obtain armored truck route sheets, guard uniforms and ninja face masks. He masterminded the operational plan of the robbery. Defendant also recruited two co-conspirators. On the eve of the robbery, defendant explained the plan to one co-conspirator, including his role in the robbery. Defendant withheld from the informant the identities of the other conspirators and withheld from the other conspirators the existence of the informant. U.S. v. Joyce, 70 F.3d 679(1st Cir. 1995).
1st Circuit says organizer need not control other participants. (431) Defendant was involved in a scheme to smuggle 232.8 kilograms of cocaine into Puerto Rico from Colombia. The First Circuit affirmed a § 3B1.1(a) enhancement. Defendant was the “land person” in charge of the all of the “merchandise.” His code names in the operation were “Gigante,” “Padrino,” and “Godfather.” The court was not required to find four others under defendant’s leadership and control. It was obvious that at least nine others were involved in the scheme. Retention of control over other participants is not an essential attribute of organizer status. U.S. v. Luciano-Mosquera, 63 F.3d 1142 (1st Cir. 1995).
1st Circuit says participants need not be convicted of criminal activity. (431) Defendant received a § 3B1.1(a) enhancement for being the leader of criminal activity involving five or more participants. Defendant challenged the enhancement by noting that the government only indicted three persons. The First Circuit affirmed the enhancement, since a participant need not be indicted or convicted of the criminal activity. The record need only permit the sentencing court to make a specific finding, based on a preponderance of the evidence, that identifies the participants with enough particularity to give credence to the upward adjustment. Here, the PSR stated without contradiction that defendant was the leader and organizer of a band of mostly juveniles that was involved in drug trafficking activities. The numerosity requirement was satisfied. U.S. v. Graciani, 61 F.3d 70 (1st Cir. 1995).
1st Circuit upholds role enhancement for defendant who managed transactions and supervised one individual. (431) Defendant challenged a § 3B1.1(c) enhancement, arguing that he was merely a “steerer” or “go-between” in two drug transactions. The First Circuit affirmed, agreeing that defendant managed the two transactions and supervised at least one other individual in the course of doing so. Defendant did more than bring people together. He was the principal through whom one group, a motorcycle gang, conducted the sales. At one meeting, defendant committed his organization to a deal later consummated in Texas. When the buyer balked at the quality of the marijuana, defendant stated that he could, and later did, procure higher grade material. Defendant also oversaw the execution of the Texas deal. While another gang member carried the marijuana into the buyer’s hotel room, defendant accepted and counted the money, and paid himself on the spot. U.S. v. Shrader, 56 F.3d 288 (1st Cir. 1995).
1st Circuit approves leadership role for recruiting drug seller, paying his commission, and providing housing. (431) The First Circuit agreed that defendant held a leadership or supervisorial role in a drug conspiracy based on evidence that he recruited one man to sell small amounts of cocaine for defendant, paid the man a fixed commission on every sale, and provided the man with housing from which to operate. U.S. v. Webster, 54 F.3d 1 (1st Cir. 1995).
1st Circuit upholds leadership enhancement for defendant who directed others in negotiating forged checks. (431) Defendant was involved in a scheme to forge and cash blank checks stolen from a local health center. Defendant argued that a § 3B1.1(c) enhancement was based on the erroneous finding that he was extensively involved in the conspiracy. The First Circuit found the enhancement proper because defendant played a central role in the scheme, and directed and instructed various individuals on how to negotiate the forged checks at the bank. U.S. v. Webster, 54 F.3d 1 (1st Cir. 1995).
1st Circuit holds three-year bank fraud involving 140 loans and millions of dollars was extensive. (431) Defendants, who were condominium developers, misrepresented to their lender that their buyers were making 10 percent down payments to acquire the condos, when in fact they were not. The district court imposed role enhancements under § 3B1.1(c). The First Circuit held that the scheme was extensive, and therefore the court should have applied enhancements under § 3B1.1(a) or (b). The conspiracy lasted for over three years, encompassed at least 140 fraudulent loans, consumed millions of dollars, affected many lives, and involved a legion of people beyond the named defendants. Thus, the criminal activity satisfied the extensiveness standard in § 3B1.1(a) and (b). U.S. v. Rostoff, 53 F.3d 398 (1st Cir. 1995).
1st Circuit holds that organizer need not control another participant. (431) The district court applied a four level § 3B1.1(a) enhancement based on defendant’s organizer role in an extensive scheme to bribe INS agents. Defendant argued that he did exercise any degree of control over others, but the Second Circuit held that this is not an essential attribute of organizer status. While the term leader implies some degree of control, the term organizer does not. A defendant may be classified as an organizer if he coordinates others so as to facilitate the commission of criminal activity. The sentencing court here correctly classified defendant as an organizer. Defendant orchestrated the entire scheme, played a pivotal role in committing the crimes, made decisions about when and where unlawful entries would be attempted, recruited accomplices, and retained a degree of control over at least one of them. U.S. v. Tejada-Beltran, 50 F.3d 105 (1st Cir. 1995).
1st Circuit says there can be more than one leader in drug conspiracy. (431) Defendant argued that he could not have been the leader or organizer of a drug importation scheme because it was run by another co-conspirator. The Second Circuit upheld a § 3B1.1 enhancement since there can be more than one person who qualifies as a leader or organizer of a criminal conspiracy. The district court found that defendant negotiated the importation scheme with a Colombian drug source, was aware at all times of the logistical elements of the scheme, recruited at least one co-defendant to take charge of support services such as securing the boat and captain, and provided payments to the confidential informant to assure readiness of the vessel to be used to rendezvous with the mother ship. U.S. v. Andujar, 49 F.3d 16 (1st Cir. 1995).
1st Circuit approves organizer enhancement for supervising ministerial acts in fraud scheme. (431) Defendant and his co-conspirators fraudulently obtained millions of dollars in real estate loans from two credit unions. One credit union manager who participated in the conspiracy testified that defendant instructed her regarding the mechanics of the loans, advising her what documents to include in the credit union files and what checks to issue following a closing. The Second Circuit upheld a managerial enhancement based on defendant’s supervision of these “ministerial” acts. These acts were not illegal per se, but were performed under defendant’s instruction by someone who was a knowing participant in the crime. Bank fraud by its nature rests on “ministerial acts.” U.S. v. Smith, 46 F.3d 1223 (1st Cir. 1995).
1st Circuit upholds enhancement for organizer and leader of drug manufacturing and distribution ring. (431) Defendant was part of an organization that manufactured and distributed a variety of illegal drugs. The 1st Circuit held that defendant was both an organizer and leader of the ring. Defendant was not an equal partner with his co-conspirators. He made the key strategic decisions for the group on what drugs would be manufactured, when the manufacturing would take place, at what locations, what processes would be used, and what quantities would be produced. Defendant also did “the lion’s share” of the planning, recruited accomplices, and exerted control over those accomplices. The district court did not err in deciding upon a role in the offense enhancement (four points) rather than a lesser “special skill enhancement.” Although some of defendant’s leadership related to his special skill as a chemist, the guidelines do not require a court to apply the lesser of two equally applicable enhancements. U.S. v. Talladino, 38 F.3d 1255 (1st Cir. 1994).
1st Circuit approves managerial role for defendant introduced as ringleader’s “partner.” (431) Defendant challenged the district court’s finding that he was a manager in a cocaine distribution ring. The 1st Circuit approved the enhancement. The acknowledged ringleader introduced defendant to an undercover agent as his “partner.” Moreover, defendant exercised supervisory authority over a co-conspirator at an abortive transaction. Defendant also renegotiated the price of the drugs at one transaction. U.S. v. Munoz, 36 F.3d 1229 (1st Cir. 1994).
1st Circuit finds defendant held leadership role in drug smuggling operation. (431) The 1st Circuit upheld a leadership enhancement based on evidence that defendant orchestrated and organized the logistics of a drug smuggling operation. Defendant had the closest links to the source of cocaine. He told a co-conspirator that the cocaine was coming from Colombia and was privy to the code that would be used to communicate with the plane that was making the airdrop. After a co-conspirator reported that he had been forced to throw seven bales of cocaine overboard because his boat had been pursed by unknown individuals, defendant took the conspirator to a pay phone where defendant called a person and had the conspirator explain what had happened. Defendant was involved in all planning stages of the operation, and directed the operations of several of the conspirators. He also financed various portions of the operation. U.S. v. Ovalle-Marquez, 36 F.3d 212 (1st Cir. 1994).
1st Circuit agrees that defendant played managerial role in drug smuggling operation. (431) The 1st Circuit agreed that defendant held a managerial role in a drug smuggling operation. He played a predominant role in planning and organizing the logistics of the criminal operation: 1) he was present at the first planning meeting; 2) he gave co-defendants instructions to make sure a boat was available to smuggle cocaine; 3) when he became suspicious of an informant, he held a meeting where it was decided to cut the informant out of the scheme; 4) he procured another boat to use in the scheme; 5) he provided firearms to be used during the smuggling operation; and 6) he met with the informant to discuss importing cocaine that had been left behind. U.S. v. Ovalle-Marquez, 36 F.3d 212 (1st Cir. 1994).
1st Circuit says court may rely on unusual drug purity to infer managerial role. (431) The 1st Circuit upheld a managerial enhancement under § 3B1.1(c), based in part on the unusual purity (98%) of the cocaine supplied by defendant. The record showed that a co-conspirator acted at defendant’s direction in setting the time and place of the drug transaction, and the price and quantity of the cocaine. The court properly relied on the unusual purity of the cocaine defendant supplied to the co-conspirator as a further ground for inferring that defendant performed a managerial role. U.S. v. Tuesta-Toro, 29 F.3d 771 (1st Cir. 1994).
1st Circuit affirms organizer role for defendant who directed couriers how to smuggle drugs. (431) The 1st Circuit upheld an enhancement under section 3B1.1(c) for defendant’s organizer role in a drug conspiracy. The district court had ample opportunity to assess the credibility of one witness who testified to defendant’s control over the drug operation. She testified that defendant planned and financed trips to Puerto Rico and Curacao to obtain drugs. He directed the couriers’ actions, showing them how to divide up and package the cocaine, how to strap it to their bodies, and how to avoid detection at customs. He also provided money to pay for the trip and the drugs. U.S. v. Jadusingh, 12 F.3d 1162 (1st Cir. 1994).
1st Circuit rejects claim that defendant acted alone in selling drugs. (431) Defendant argued that a leadership enhancement under § 3B1.1(a) was improper because he acted alone in selling cocaine to multiple “independent customers.” The 1st Circuit rejected this characterization. The evidence showed that defendant initiated cocaine discussions with one drug dealer, convinced two others to work with him, tried to persuade a third to sell cocaine for him, actively supervised the collection of debts, instructed one participant to take over the Maine distribution business after two others were arrested, and exercised a high degree of decision-making authority both in organizing shipments and in directing and coordinating one dealer and a courier. The district court could plausibly conclude that five or more participants, excluding those defendant claimed were merely customers, were involved in the scheme. U.S. v. Olivier-Diaz, 13 F.3d 1 (1st Cir. 1993).
1st Circuit affirms managerial enhancement where courier brought drugs at defendant’s request. (431) The 1st Circuit affirmed a managerial enhancement under section 3B1.1(c) where defendant conceded that a courier brought drugs to defendant’s apartment at his request. Although defendant contended that the courier did so as the agent of the supplier, and that defendant exercised no control over the courier, he offered no evidence to contradict the presentence report’s version of the chain of command. U.S. v. Morillo, 8 F.3d 864 (1st Cir. 1993).
1st Circuit affirms organizer enhancement for defendant who negotiated with undercover agents. (431) Defendant’s sentence was enhanced for being an organizer of criminal activity. The 1st Circuit affirmed. Defendant took charge of negotiations with undercover agents regarding when drugs would be transferred, orchestrated the arrival of the vans in which the drugs were to be transported, and directed the actions of two coconspirators. U.S. v. De La Cruz, 996 F.2d 1307 (1st Cir. 1993).
1st Circuit upholds aggravating role enhancements in fraudulent time share development. (431) Defendants participated in a fraud scheme involving the sale of time shares in a proposed resort. Numerous misrepresentations about the resort were made to potential buyers, including the misrepresentation that the resort was a member of RCI, a time share exchange organization. The 1st Circuit affirmed a leadership enhancement for the originator of the development, and supervisorial enhancements to the owners of the development. The originator hired the project director, was in charge of marketing, and was present every day. He directed the installation of an RCI room, and told at least one salesman that they were already a member of RCI. There was also evidence that this defendant was improperly milking the scheme. The owners of the development were managers or supervisors. Although they did not devise the scheme, they were aware of deliberate misrepresentations made by their salesmen. U.S. v. Cronin, 990 F.2d 663 (1st Cir. 1993), superseded on other grounds by statute as stated in U.S. v. Hensley, 91 F.3d 274 (1st Cir. 1996).
1st Circuit upholds finding that defendant was organizer of insurance fraud scheme. (431) Defendant was involved in a conspiracy which made numerous fraudulent insurance claims on vehicles registered under fictitious names. The 1st Circuit affirmed that defendant was an organizer, leader or supervisor of the conspiracy. He initiated the conspiracy with another co-conspirator, received significantly more money from the conspiracy than his co-conspirator, used the cars fraudulently registered to the co-conspirator to stage accidents, and he paid the co-conspirator for his cooperation in the scheme. U.S. v. Balogun, 989 F.2d 20 (1st Cir. 1993).
1st Circuit affirms managerial status in racketeering scheme. (431) The 1st Circuit affirmed that defendant held a managerial role in a racketeering and extortion scheme. In addition to extorting money himself, he used others as conduits for obtaining bribes; he manipulated the city’s highway director in order to extract free services for himself from a contractor doing business with the city; he gave occasional directions to one of his co-conspirators; and in general, he made significant decisions, including the decision of how much would be demanded and from who it would be extorted. U.S. v. Savoie, 985 F.2d 612 (1st Cir. 1993).
1st Circuit affirms that defendant was manager or supervisor of counterfeiting ring. (431) The 1st Circuit affirmed a three level enhancement under section 3B1.1(b) based upon defendant’s managerial or supervisorial role in a counterfeiting conspiracy. The district court found that defendant had “seduced” a co-conspirator into joining the conspiracy and that he in turn brought in others, including those who actually printed the counterfeits; that defendant, under an assumed name, purchased the paper on which the counterfeit obligations were printed; and that the illegal activity was extensive as it involved approximately $800,000 in counterfeit obligations. U.S. v. Rodriguez-Alvarado, 985 F.2d 15 (1st Cir. 1993).
1st Circuit affirms leadership role for supplying and “fronting” cocaine, and collecting drug debts. (431) The 1st Circuit affirmed a four level leadership enhancement under section 3B1.1(a) based on evidence that defendant supplied and “fronted” cocaine, and after his distributor’s arrest, directly supervised the collection of drug debts from the distributor’s customers. When the distributor’s lieutenant took over the distribution network, defendant provided operational oversight on a regular basis. U.S. v. Bello-Perez, 977 F.2d 664 (1st Cir. 1992)
1st Circuit upholds leadership role of seller of pornographic videotapes. (431) The 1st Circuit affirmed a two level enhancement under section 3B1.1(c) based upon defendant’s leadership role in a conspiracy to distribute obscene videotapes. Defendant instructed a co-conspirator to bring the videotapes to a meeting with a government agent. The co-conspirator arrived with the tapes, and remained while defendant conducted the sale. Moreover, there was evidence that (a) defendant drew a diagram for the undercover agent, depicting himself at the apex of the criminal enterprise, (b) defendant possessed the greater capacity to reproduce videotapes, rented the office space where the tapes were reproduced, and rented storage space for the videotapes, (c) most of the pornographic material involved in the conspiracy were turned over to defendant by his co-conspirators, (d) when the co-conspirators were arrested, most of the tapes were seized from defendant, and (e) most of the 96 videotapes made available to government operatives were acquired from defendant. U.S. v. Schultz, 970 F.2d 960 (1st Cir. 1992).
1st Circuit affirms leadership role for drug dealer who ran meetings. (431) The 1st Circuit found that there was ample evidence to support the conclusion that defendant was a leader or organizer of his drug operation. The conspirators were in defendant’s car when they attended their first meeting with a government informant. The second meeting took place in defendant’s apartment. The tape recording of the meeting shows that defendant led the informant into the back room of the apartment and showed him the drugs. Defendant also proposed a selling price for the cocaine and discussed arrangements for meeting with possible buyers. U.S. v. Font-Ramirez, 944 F.2d 42 (1st Cir. 1991).
1st Circuit affirms managerial enhancement based on testimony of defendant’s drug customer. (431) The 1st Circuit affirmed a two-level enhancement under guideline section 3B1.1(c) based on defendant’s managerial role in the offense. The district court relied heavily upon the testimony of one prosecution witness, who stated that defendant took over defendant’s father’s drug operation. Defendant assumed his father’s accounts receivable by demanding and receiving payment from the witness for a cocaine debt owed to the father. Defendant also stated to the witness that he had a personal drug runner. Moreover, the district court found that defendant supplied drugs to an organization and controlled the details of the transactions. Setting the details of drug transactions, where the offender also directs at least one accomplice, is sufficient to uphold an enhancement. While the appellate court might have given less credence to the witness’s testimony, a fact finder’s choice between two permissible views cannot be clearly erroneous. U.S. v. Veilleux, 949 F.2d 522 (1st Cir. 1991).
1st Circuit affirms that defendant’s scheme to defraud various government agencies was otherwise extensive. (431) Defendant and his family fraudulently received benefits from the social security administration and seven state unemployment agencies. The 1st Circuit affirmed that defendant’s criminal activity was “otherwise extensive” under section 3B1.1(a). The offense of conviction involved defendant, three other criminally culpable family members, and countless employees of the government offices that processed the bogus claims. Moreover, the course of the criminal activity spanned 12 years, crossed seven states, used many fictitious identities, infiltrated two different sets of programs and involved eight different government agencies. U.S. v. Dietz, 950 F.2d 50 (1st Cir. 1991).
1st Circuit rules aggravating role does not require conduct more culpable than average. (431) Defendant contended that an aggravating role adjustment would only be proper if his conduct was more egregious than the average purchaser of marijuana. The 1st Circuit rejected this argument. The language relied on by defendant in U.S. v. Daughtrey, 874 F.2d 213 (4th Cir. 1989) dealt with a downward adjustment for a mitigating role under section 3B1.2. Although the aggravating role adjustment does not absolutely forbid a court from making comparisons to the “average” participant, it does not require such a comparison. U.S. v. Rotolo, 950 F.2d 70 (1st Cir. 1991).
1st Circuit upholds leadership role where defendant conducted negotiations. (431) The 1st Circuit rejected defendant’s claim that he was not an organizer, leader, manager or supervisor of a drug conspiracy under guideline section 3B1.1(c). There was no question that defendant’s co-conspirator was distinctly subordinate to defendant. Defendant, not the co-conspirator, conducted the negotiations with the informant and with the undercover agents, and received payment for the cocaine. U.S. v. Moreno, 947 F.2d 7 (1st Cir. 1991).
1st Circuit holds that defendant had control over “money men” for purposes of determining leadership enhancement. (431) The 1st Circuit ruled that the district court could have reasonably found that defendant had control over four, rather than two, other participants in a drug conspiracy for purposes of an enhancement under guideline section 3B1.1. In addition to the two participants which defendant conceded he supervised, there was evidence that two other individuals who were present at the drug transaction served as “money men” for defendant. These individuals were there to finance the transaction. U.S. v. Panet-Collazo, 960 F.2d 256 (1st Cir. 1992).
1st Circuit upholds supervisory role for drug conspirator. (431) The 1st Circuit upheld a three level enhancement for defendant’s supervisory role in a drug conspiracy under section 3B1.1(b). The district court found that although defendant was not the organizer, he was the supervisor of another conspirator. “He was involved in the transaction, he had certain authority to do and undo, get the people together . . . so the transaction could be done.” This assessment of defendant’s role focused on the appropriate factors and was supported by the record. U.S. v. Panet-Collazo, 960 F.2d 256 (1st Cir. 1992) No. 91-1404.
1st Circuit affirms leadership role of captain of boat smuggling marijuana. (431) Defendant was discovered by the Coast Guard on a boat carrying 131 bales of marijuana. Defendant challenged a four-point enhancement for being a leader of the marijuana operation, contending that he was merely a crew member and that he assumed the role of spokesperson with the Coast Guard because he was the only person on board who spoke English. The 1st Circuit upheld the enhancement. Defendant did more than answer the Coast Guard’s questions. He authorized the Coast Guard to board the vessel and granted permission for them to search the vessel. After being taken into custody, three of his five co-defendants identified defendant as the captain of the vessel. U.S. v. Piedrahita-Santiago, 931 F.2d 127 (1st Cir. 1991).
1st Circuit upholds leadership role of defendant who piloted boat containing illegal aliens. (431) The 1st Circuit rejected defendant’s argument that there was insufficient evidence to prove that he was a leading participant in an illegal alien smuggling ring. A number of passengers stated that defendant and a co-defendant co-piloted the boat containing illegal aliens during a two-day trip. The court did, however, express concern over the government’s practice of labeling as “captains” (and thus leaders) individuals whose sole participation in an illegal alien smuggling venture was to occasionally steer the vessel. Not everyone who lays a hand on a ship is its captain; there can be only one captain. The appellate court instructed sentencing courts that, “whenever the government attempts to ascribe principal status to a defendant in an illegal alien smuggling case, special care must be taken to ensure that the defendant’s role was in fact as the government has alleged.” U.S. v. Reyes, 927 F.2d 48 (1st Cir. 1991).
1st Circuit upholds managerial adjustment based upon unusual purity of cocaine. (431) The district court found that defendant played a managerial role in a cocaine conspiracy based upon the fact that defendant was found in possession of “unusually pure” cocaine. The 1st Circuit upheld the enhancement. Such a high level of purity, in and of itself, could be sufficient to support the adjustment because such proximity to the source denotes a managerial role in the commission of the offense. However, the sentencing court also relied upon the large quantity of cocaine involved. These identified factors were sufficient to support the adjustment. Defendant claimed that his status as a simple courier was supported by the fact that he ran into trouble with his contacts in Colombia for selling the drugs on credit. However, the district court could have rationally believed that he had the authority to sell the drugs without receiving payment. U.S. v. Iguaran-Palmar, 926 F.2d 7 (1st Cir. 1991).
1st Circuit affirms leadership enhancement for supplier of heroin. (431) Defendant contested the propriety of enhancing his offense level for being a leader of a criminal activity involving more than one but less than five participants. The 1st Circuit upheld the enhancement. The district judge specifically found that defendant was the heroin supplier for a co-defendant and outranked him in the heroin hierarchy. Defendant retained dominion over the drugs and the co-defendant, “like many other salesmen, had to check with the proprietor before making any commitments to would-be purchasers.” U.S. v. Akitoye, 923 F.2d 221 (1st Cir. 1991).
1st Circuit rejects claim that defendant and co-defendant had role parity. (431) Defendant pled guilty of conspiracy to distribute cocaine and other drug related charges. The district court had increased defendant’s offense level under guideline § 3B1.1 because defendant (a) arranged the cocaine transaction, (b) caused his co-defendant to deliver the cocaine, and (c) received the purchase money and distributed a portion of it to the government informant who acted as broker. Defendant argued that these factors did not establish that he exercised control over another participant, but merely that his role in the offense was on a par with his co-defendant. The 1st Circuit affirmed, finding the district court’s action not unreasonable given the facts before it. Defendant was acting on his own when he agreed to supply the government informant with two kilograms of cocaine, at a fixed price. At the transaction it was defendant who received the payment for the cocaine, decided to pay the $1,000 broker fee, and tendered it to the informant. U.S. v. Calderon, 935 F.2d 9 (1st Cir. 1991).
1st Circuit finds that defendant who bragged that drugs were his was leader of drug ring. (431) An undercover agent arranged to purchase cocaine from a drug dealer. Defendant was present at the purchase, and advised the agent that he was there “to do the business himself” because the other dealer “did not know how to do the deal.” The agent asked defendant if the cocaine belonged to defendant and defendant responded affirmatively. Although defendant argued that his statements to the agent were “mere bragging, not factual assertions,” the 1st Circuit found that this was sufficient evidence for the district court to conclude that defendant was an organizer, leader or supervisor. U.S. v. Vega-Encarnacion, 914 F.2d 20 (1st Cir. 1990).
1st Circuit reverses upward adjustment for “manager or organizer” status. (431) The district court concluded that because the government informant had helped defendant transport and unload shipments, defendant was an “organizer or manager.” The 1st Circuit reversed, ruling that there was insufficient evidence to show defendant exercised control or was otherwise responsible for organizing others in commission of the offense. The evidence only showed defendant engaged in a number of “private drug distributions” in which he did all the work himself. When the informant assisted defendant, he did so as an “independent buyer” and not as a participant organized or directed by defendant. The mere fact that defendant had large quantities of the drug did not make him a “manager or organizer.” U.S. v. Fuller, 897 F.2d 1217 (1st Cir. 1990).
1st Circuit upholds finding that defendant played a “managerial” role in the offense. (431) Reviewing the trial court’s finding under the “clearly erroneous” standard, the 1st Circuit upheld the adjustment for managerial role under U.S.S.G. § 3B1.1(c). Although defendant objected generally, he did not challenge any of the factual information in the presentence report. When asked whether he provided the wallet and belt full of drugs to his co-defendants, he admitted having done so. The 1st Circuit declined “to require the judge to write out more specific findings about the defendant.” U.S. v. Fuentes-Moreno, 895 F.2d 24 (1st Cir. 1990).
1st Circuit holds managerial position is a factual determination subject to clearly erroneous review. (431) Whether defendant is an organizer or leader of a charged criminal activity (which would subject him to a two point increase in offense level under § 3B1.1) is a factual question subject to clearly erroneous review. Since the determination in this unrelated case was not without foundation, the sentence was proper. U.S. v. Diaz-Villafane, 874 F.2d 43 (1st Cir. 1989).
2nd Circuit agrees that defendant held leadership role in sex trafficking conspiracy. (431) Defendant was convicted of sex trafficking and conspiracy to violate sex trafficking laws. The district court applied a § 3B1.1(a) leadership enhancement, citing evidence that six or seven prostitutes were provided by defendant to brothels. The court found that defendant “worked to provide prostitutes to brothels and decided where she would try to place them based on the prostitute’s personal characteristics, such as how old they were, how beautiful they were.” Defendant also used many taxi drivers who transported prostitutes to various brothels around the East Coast.. The Second Circuit found that the evidence amply supported the district court’s finding that defendant had a leadership role in the conspiracy, and that the conspiracy was extensive. U.S. v. Mi Sun Cho, 713 F.3d 716 (2d Cir. 2013).
2nd Circuit reverses for refusal to reconsider organizer enhancement at resentencing. (431) Defendant was convicted by a jury of Clean Air Act violations arising from his malfeasance as an air monitor for asbestos removal projects. The district court vacated one conviction, but on the government’s initial appeal, the Second Circuit reinstated the jury verdict, and remanded. At defendant’s original sentencing, the district court had refused to apply a § 3B1.1(a) organizer increase because defendants had been “convinced to take part in this criminal endeavor by more criminally predisposed individuals.” At re-sentencing, however, the district court never mentioned the organizer enhancement, notwithstanding the reinstatement of a count of conviction that involved eight additional projects. The Second Circuit ruled that in refusing to consider the organizer enhancement at resentencing, the district court erred. It failed to consider that the reinstatement of the conspiracy count had changed the “factual mosaic related to th[e] offenses [of conviction]” such that it was required to analyze the organizer enhancement anew. U.S. v. Desnoyers, 708 F.3d 378 (2d Cir. 2013).
2nd Circuit relies on emails to establish defendant’s managerial role in fraud scheme. (431) Defendant was convicted of wire fraud based on his participation in an advance-fee scheme. Relying in part on emails between defendant and others involved in the scheme, the district court found that defendant acted as a manager, and the overall criminal activity involved five or more participants. The Second Circuit upheld the managerial role enhancement. Defendant had used the same email address for about 10 years, and had exclusive access to that account until the end of 2008. Among the email messages sent to and from that account were (1) emails soliciting potential victims; and (2) emails concerning current and potential victims. The emails included instructions to participants on sending emails, creating fake websites, calling victims and, on one occasion, cleaning defendant’s room in preparation for his return from Ghana. The emails also supported the district court’s conclusion that there were five or more participants, counting defendant and his wife as two. Emails from defendant to three other unique email addresses provided instructions as to how to proceed with various components of the scheme. It was not clearly erroneous for district court to conclude these emails were generated by people other than the defendant. U.S. v. Diamreyan, 684 F.3d 305 (2d Cir. 2012).
2nd Circuit upholds organizer increase where defendant supplied drugs to trafficking ring and influenced leader. (431) Defendant received a four-level enhancement under § 3B1.1(a) based on his organizing or leadership role in an extensive drug trafficking ring run by Hiciano. The Second Circuit found no clear error. Defendant was a significant supplier of drugs to the organization, which gave him influence over Hiciano’s management decisions. Although defendant did not issue orders to lower-ranked members, his control over Hiciano affected the operation of the distribution ring as a whole. Defendant’s position as Hiciano’s creditor enabled him to require Hiciano to increase the distribution ring’s sales efforts (or otherwise alter its activities) in order to pay the ring’s debts. In one instance, defendant set fire to a vehicle he believed to belong to Hiciano, in order to intimidate Hiciano into paying the more than $90,000 he owed to defendant. Moreover, any error was harmless, because defendant was sentenced to the statutory minimum term of imprisonment. U.S. v. Batista, 684 F.3d 333 (2d Cir. 2012).
2nd Circuit counts lawyer’s clients as unknowing participants in immigration fraud scheme. (431) Defendant, formerly an immigration lawyer, was convicted of visa fraud and conspiracy to commit visa fraud. The Second Circuit upheld a four-level enhancement for being an organizer or leader of criminal activity involving five or more participants or was otherwise extensive. The uncontested number of knowing participants was at least three. In addition, a fair number of defendant’s clients counted as unknowing participants in the conspiracy. These clients signed fraudulent I-687 applications and sought affidavits from third parties in support of those applications. Although it was possible that defendant could have filed false applications simply by pulling information from thin air, that is not what the evidence indicated he did. Under his scheme, defendant needed real clients to provide some of their own information and to secure the supporting affidavits that his office prepared. These clients were “peculiar and necessary to the criminal scheme.” U.S. v. Archer, 671 F.3d 149 (2d Cir. 2011).
2nd Circuit finds that defendant was leader of drug conspiracy. (431) Defendant received a four-level increase for being the leader of a drug conspiracy involving five or more participants. § 3B1.1(a). The Second Circuit affirmed. Defendant gave instructions to Barraza for the dilution of drugs in Barraza’s possession, had the power to fire Ibarra, who had been hired by Barraza, and instructed Barraza to hide in Mexico when law enforcement agents were closing in on the organization’s operation. Defendant also acknowledged his own personal responsibility for the “debt” to cocaine suppliers that resulted from the government’s seizure of large quantities of cocaine from co-conspirators in New York. The Second Circuit found this sufficient to support the leadership increase. U.S. v. Chavez, 549 F.3d 119 (2d Cir. 2008).
2nd Circuit holds that defendant was manager of bombing conspiracy. (431) Defendant was convicted of various offenses arising from his involvement in al Qaeda’s conspiracy to bomb American embassies in Kenya and Tanzania. The Second Circuit held that he was a manager or supervisor of the conspiracy, and affirmed a §3B1.1(b) enhancement. Defendant (1) participated in private meetings with Osama Bin Laden, (2) was the “paymaster” for Bin Laden’s enterprises, (3) procured fake travel documents, (4) served as the head of the Nairobi Al Qaeda cell, and (5) delivered messages directly from Bin Laden directing the Nairobi cell to prepare for military activity. In re Terrorist Bombings of U.S. Embassies in East Africa, 549 F.3d 146 (6th Cir. 2008).
2nd Circuit holds that defendant supervised his bookkeeper in fraudulent loan scheme. (431) Defendant fraudulently obtained over a dozen bank loans. The Second Circuit affirmed a § 3B1.1(c) enhancement for his supervision of a criminally responsible participant. There was uncontested evidence that Ramsey, defendant’s bookkeeper, while under defendant’s supervision and at his direction, prepared fraudulent tax forms and other documents that were used in the bank fraud scheme. Ramsey also assisted defendant’s bank fraud plan by writing a letter to a bank misrepresenting herself as a regional manager of a financial group and falsely stating that defendant earned a monthly average of $115,000 in commissions. The deliberate deception entailed in drafting such a letter to a financial institution supported the trial court’s finding that Ramsey was not an unwilling participant in defendant’s fraudulent activities. U.S. v. Kilkenny, 493 F.3d 122 (2d Cir. 2007).
2nd Circuit agrees that defendant supervised his father despite father’s acquittal. (431) Defendant attempted to smuggle $659,000 in U.S. currency to Egypt through a U.S. airport in the luggage of his parents. Defendant challenged a § 3B1.1(c) enhancement, arguing that the government did not show that he supervised criminally culpable persons since his mother was not charged and his father was acquitted. The Second Circuit disagreed. A “participant” need not have been convicted. The district court’s conclusion that defendant recruited his parents into the conspiracy was well-founded. The father’s reaction to being detained at the airport was not one of surprise, as would be expected if he had no knowledge of the plot, but was clearly indicative of knowledge of criminal activity. In addition, in a discussion with a co-conspirator, defendant voiced his concern that his father would tell the agents what he knew about the smuggling operation. U.S. v. Al-Sadawi, 432 F.3d 419 (2d Cir. 2005).
2nd Circuit holds that facts supported defendants’ leadership role in drug conspiracy. (431) Defendants Marvin and Isaac were convicted of violating work-practice standards for asbestos set out in the Clean Air Act. The Second Circuit found sufficient evidence to support defendant’s Marvin’s leadership role in the scheme. First, there were at least two knowing participants (Marvin and Isaac) and as many as seven participants who were unknowing, including three named workers and another four day laborers. The labor of these persons was clearly necessary to the violation. Under the direction of Marvin, the men worked without protective clothing to cut asbestos off pipes, place it in unsealed containers and load the boxes into a compactor truck. There was sufficient evidence to support a finding that Isaac held a supervisory role. The building’s new tenant testified that Isaac acted as Marvin’s “right-hand man”, accompanied a private environmental consultant through the property, and spoke with DEP officials to account for the asbestos removal. Section 3B1.1 was applicable to both defendants. U.S. v. Rubenstein, 403 F.3d 93 (2d Cir. 2005).
2nd Circuit applies leadership increase to defendant who met all criteria in application notes. (431) Defendant met each of the criteria listed in Note 4 to § 3B1.1 for managing drug-related activities. He personally recruited two co-conspirators to serve as drug couriers in an ambitious scheme to transport large quantities of marijuana cross-country on a regular basis in order to supply defendant’s New York distribution scheme. Defendant planned and organized every detail of these drug transports. He exercised total control over the couriers’ conduct, giving them almost no discretion. He also spend hundreds of thousands of dollars financing all aspects of the scheme, and claimed the largest share of the profits. The Second Circuit found that defendant’s challenge to a § 3B1.1 was patently meritless. U.S. v. Gaskin, 364 F.3d 438 (2d Cir. 2004).
2nd Circuit agrees that defendant was leader of alien smuggling and hostage-taking conspiracy. (431) Defendant and others operated a scheme to smuggle Chinese aliens into the U.S. for a fee. Those who could not pay their smuggling fees were held hostage and beaten. The Second Circuit affirmed a four-level leadership increase under § 3B1.1(a). The district court provided detailed factual findings in support of its conclusion that defendant was a leader or organizer in the hostage-taking conspiracy. The court noted that when Ping departed for China, he specifically tabbed defendant as the “boss” in charge of the New York base of operations. This title was well-deserved, since defendant exercised substantial control over the New York end of the enterprise. Ping told another conspirator to contact defendant if he “needed anything,” an instruction that the conspirator took to heart. Every time a group of aliens arrived in New York, the conspirator would contact defendant to find out who the aliens belonged to, and whether the aliens had paid their money. Referencing a master list that defendant and Ping maintained, defendant would determine whether the aliens were customers of his or Ping’s, and direct them accordingly. Defendant exercised his discretion in other ways, recruiting one man as an accomplice to assist him in guarding aliens while they made arrangements for payment of their fees. Defendant also gave orders to various participants working under him, instructing the guards to intimidate and threaten the aliens in order to expedite their payment of the smuggling fees. U.S. v. Tian, 339 F.3d 143 (2d Cir. 2003).
2nd Circuit holds that court’s adoption of PSR’s findings satisfied obligation to make factual findings. (431) Defendant argued that the district court did not make adequate factual findings to support his receipt of a four-point leadership increase under § 3B1.1(a). In order to apply that increase, the court must make two specific factual findings: (1) that defendant was an organizer or leader, and (2) that the criminal activity either involved five or more participants or was “otherwise extensive.” Here, the PSR included a finding that defendant was the leader of a fraudulent scheme and that more than five participants were involved. In its written judgment, the court explicitly “adopt[ed] the factual findings and guidelines application in the presentence report” with the exception of a separate abuse of trust increase. The Second Circuit found that the district court satisfied its obligation to make the requisite factual findings when it indicated in its written judgment that it was adopting the findings in the PSR. U.S. v. Eyman, 313 F.3d 741 (2d Cir. 2002).
2nd Circuit affirms supervisor increase for defendant who made sure “everything was running straight.” (431) The trial evidence showed that defendant was the person in day-to-day charge of the street-selling aspects of the drug operation. For example, Fluitt, who worked for Streater, testified that defendant became Streater’s “lieutenant” in charge of sales. He testified that defendant was in charge of distributing bundles of cocaine packages to the street sellers and collecting the proceeds of their sales. Defendant was responsible for “mak[ing] sure everything [was] running straight,” that money was being accounted for, and that the “work [kept] coming.” Streater testified that defendant regularly drove through the area checking on whether he was still at work, inquiring whether he needed more bundles, replenishing sellers’ supplies, and collecting the proceeds of their sales. Given this record, the Second Circuit found no error in the district court’s finding that defendant was a supervisor or manager in the operation. U.S. v. Blount, 291 F.3d 201 (2d Cir. 2002).
2nd Circuit says defendant held leadership role both in fraud and money laundering activities. (431) Defendant argued that he did not deserve a § 3B1.1 leadership increase because a co-defendant conceived, organized, managed, and primarily profited from their securities fraud scheme. The Second Circuit affirmed the increase. The district court found that defendant and the co-defendant conceived the scheme and defendant was to receive half of the proceeds of the sale of securities. It was from defendant’s share of the proceeds that the others who sold stock from other offices were paid. Defendant was involved in recruiting others to sell stock and the stock was sold from the offices of his firm. Defendant was an active participant in the scheme and a principal beneficiary of the crime through the expansion of his firm. These findings were supported by the trial record. Defendant also properly received a two-level increase for his leadership role in the money laundering activity. Defendant was responsible for instructing his co-conspirators how the transfers were to be made, and he explained that the funds were not to be paid directly, but to other accounts he directed. U.S. v. Szur, 289 F.3d 200 (2d Cir. 2002).
2nd Circuit finds no double counting where multiple fraud victims were involved. (431) Defendant committed a variety of frauds through his family business. He challenged a § 3B1.1(a) leadership enhancement because he also received a § 2F1.1(b)(2) increase for more than minimal planning. The Second Circuit held that both increases did not constitute improper double counting. Section 2F1.1(b)(2) provides that the two-level enhancement may be premised on more than minimal planning or the fact that more than one victim was defrauded. Both grounds applied to defendant. Where, as here, there are multiple fraud victims, defendant’s role as a planner could be used under § 3B1.1(a) without precluding application of § 2F1.1(b)(2). U.S. v. Bennett, 252 F.3d 559 (2d Cir. 2001).
2nd Circuit says defendants need only manage one other participant for leadership increase. (431) Defendants were convicted of RICO charges stemming from a scheme to corrupt the New York City Transit Police Benevolent Association (TPBA) through bribery and other illegal acts. They both received four-level enhancements under § 3B1.1(a) for their leadership roles in a criminal scheme involving five or more participants. The Second Circuit ruled that defendants were subject to the enhancement even if they each managed only one other participant, not five. See note 2 to § 3B1.1. U.S. v. Zichettello, 208 F.3d 72 (2d Cir. 2000).
2nd Circuit holds that officer who received car at huge discount was participant in corruption scheme. (431) Defendant paid false invoices to a car dealer who leased cars to the New York City Transit Police Benevolent Association (TPBA). The dealer in turn sold cars at large discounts to TPBA members selected by defendant and to defendant’s family and friends. Defendant argued that the selected TPBA members and his family and friends who benefited were not “participants” for purposes of a § 3B1.1(c) managerial increase. In U.S. v. Melendez, 41 F.3d 797 (2d Cir. 1994), the court held that individuals who had received stolen money from a defendant were not “participants” because none of them were involved with the crime. The Second Circuit found Melendez distinguishable and affirmed the enhancement. Unlike the recipients of stolen property in Melendez, the district court had an evidentiary basis to conclude that at least one of the individuals who received a car was criminally involved in defendant’s scheme. One TPBA officer purchased a new car at an 80% discount. The officer had to have known from the size of the discount that some illegitimate quid pro quo involving the TPBA was the catalyst for the transaction. U.S. v. Zichettello, 208 F.3d 72 (2d Cir. 2000).
2nd Circuit holds that a defendant can be included among the “five or more participants.” (431) The district court ruled that defendants were organizers or leaders of an arson conspiracy involving five or more participants under § 3B1.1(a). The enhancement could only be upheld if “five or more participants” could include the defendants themselves. The Second Circuit held that a defendant may properly be included as a participant when determining whether the criminal activity “involved five or more participants” for purposes of a leadership role enhancement under § 3B1.1. The plain text of the guideline supports this conclusion; it does not distinguish the defendant subject to the enhancement from the other individuals involved in the scheme. Note 1 defines a “participant” as “a person who is criminally responsible for the commission of the offense,” a definition that plainly includes the defendant. Note 2 talks about a defendant’s actions with respect to “other participants” or “another participant,” again indicating that the defendant himself should be considered a participant. Finally, all other circuits to address this issue have decided that a defendant may be included when determining the number of participants. U.S. v. Paccione, 202 F.3d 622 (2d Cir. 2000).
2nd Circuit upholds enhancement despite failure to say how unknowing participants aided scheme. (431) The district court found defendant’s criminal activity was “otherwise extensive” under § 3B1.1(a) because it involved numerous unknowing participants. Defendant claimed this finding was clearly erroneous because the court did not properly apply the three-part test in U.S. v. Carrozzella, 105 F.3d 796 (2d Cir. 1997). Carrozzella says an “otherwise extensive” finding should be based on (1) the number of knowing participants, (2) the number of unknowing participants, and (3) the extent to which the services of the unknowing participants were peculiar and necessary to the criminal scheme. The Second Circuit upheld the § 3B1.1(a) enhancement even though the district court did not expressly address Carrozzella’s third prong. District courts should be given “latitude” concerning their supervisory role findings, even when their “findings were not as precise as they might have been.” Although the court did not explicitly articulate “the extent to which the services of the unknowing participants were peculiar and necessary to the criminal scheme,” the court described how defendant used the casinos and its personnel to cash and launder checks. U.S. v. Napoli, 179 F.3d 1 (2d Cir. 1999).
2nd Circuit refuses to remand despite lack of findings where defendant did not object to enhancement. (431) Defendant challenged for the first time on appeal a § 3B1.1(a) leadership enhancement, claiming that there was no showing that five individuals were involved in the drug offense, that he exercised direct control over another participant, or that his drugs block’s activities were extensive. The Second Circuit found no plain error. Even without the four-level enhancement, defendant’s 288-month sentence would still fall within the resulting guideline range of 262-327 months. In addition, although the court did not make an explicit finding that defendant was a leader, the court’s accepted the PSR’s findings and guideline calculations that emphasized defendant’s leadership role in the drug block. Generally, a sentencing court, rather than simply adopting the PSR, must make “specific factual findings” to sustain a § 3B1.1. However, since defendant failed to object to the PSR’s four-level enhancement, and since the record clearly demonstrated that defendant had a leadership role and employed well over five participants, the appellate court declined to remand the enhancement issue for further findings. U.S. v. Diaz, 176 F.3d 52 (2d Cir. 1999).
2nd Circuit says detailed description of unknowing participants supported “otherwise extensive” finding. (431) Defendant made numerous false statements to a bank in order to obtain a business loan. The district court found that he held a leadership role in criminal activity that was “otherwise extensive” under § 3B1.1(a). To determine whether a criminal activity is “otherwise extensive,” previous cases have made a headcount of unknowing participants, but have required some specificity in the sentencing court’s count of the heads and an acknowledgement of the roles played. The Second Circuit held that the district court’s description of the knowing and unknowing participants and their roles in defendant’s scheme was adequate to support the court’s “otherwise extensive” finding. The court detailed the actions of four individuals and several bank officials who accepted bribes to facilitate defendant’s financial exploits. There were no vague references to lawyers, bankers, accountants or the like without substantial detail to make clear their role in defendant’s scheme. U.S. v. Chacko, 169 F.3d 140 (2d Cir. 1999).
2nd Circuit agrees that defendant was leader of organized crime family. (431) Defendant was convicted of racketeering, murder conspiracy and related charges based on his participation in a street war between factions of an organized crime family. The Second Circuit affirmed a § 3B1.1 enhancement since the trial record showed that defendant was a “central leader and planner, who organized a number of unconsummated murder conspiracies and communicated important messages from his brother, the boss of the Colombo crime family, to the other capos and soldiers of the Persico faction.” The district court’s findings in support of the enhancement, although not as precise as they might have been, satisfied the “specific findings of fact” requirement of § 3B1.1 because the court made a specific determination as to the exact conspiracies in which defendant held a supervisory role. U.S. v. Persico, 164 F.3d 796 (2d Cir. 1999).
2nd Circuit upholds finding that criminal activity was otherwise extensive. (431) Defendant embezzled money from a union’s employee pension plan. The district court found that the criminal activity was otherwise extensive and imposed a four-level § 3B1.1(a) leadership enhancement rather than the two levels recommended in the PSR. The Second Circuit affirmed the § 3B1.1(a) enhancement since the court properly found defendant’s criminal activity was “otherwise extensive.” The court identified one other knowing participant, and at least eight unknowing participants whose services were peculiar and necessary to the scheme, including the union’s accountant, bank officers, the trust’s co-fiduciary, and various lawyers involved along the way. This satisfied the 3-part test in U.S. v. Carrozzella, 105 F.3d 796 (2d Cir. 1997). U.S. v. Nolan, 136 F.3d 265 (2d Cir. 1998).
2nd Circuit holds scheme to conceal payments from DOT and bankruptcy court was “otherwise extensive.” (431) Defendant worked for Braniff Airlines, which filed for bankruptcy. When a corporate successor later attempted to restart the airline, the Department of Transportation (DOT) required the airline to provide sworn affidavits that defendant would not be involved with Braniff. Despite these representations, defendant remained heavily involved, and the airline filed for bankruptcy yet again. Defendant laundered payments for his services through an advertising agency, and concealed these payments from the bankruptcy court. The Second Circuit agreed that the criminal activity was “otherwise extensive” for purposes of a leadership enhancement under § 3B1.1(a). The court properly limited its inquiry to the persons involved in defendant’s scheme, including defendant, his father, the owner of the advertising agency, a major shareholder of the airline, and a large number of the airline employees. This included the Vice President of Finance and others in the airlines’ accounting department who followed defendant’s instructions to pay the advertising agency. U.S. v. Spencer, 129 F.3d 246 (2d Cir. 1997).
2nd Circuit affirms role enhancement despite testimony that a different conspirator was the leader. (431) Defendant participated in a fraudulent telemarketing scheme. The Second Circuit affirmed a § 3B1.1(a) leadership enhancement based on testimony of cooperating witnesses that defendant supplied “leads” for potential customers and was involved in setting up all three companies involved in the offense. Although another witness attributed the ownership and leadership to another conspirator, there can be more than one person who qualifies as a leader or organizer of a criminal conspiracy. U.S. v. Escotto, 121 F.3d 81 (2d Cir. 1997).
2nd Circuit requires role enhancement for owner of car dealership that laundered funds for drug dealers. (431) Defendant owned a car dealership that sold cars to drug dealers, who frequently purchased the cars with cash using names other than their own. The dealership routinely substituted checks for the cash payments to avoid cash reporting requirements. Defendant was convicted of money laundering. The district court refused to apply a § 3B1.1 role enhancement because defendant’s co-conspirator played a larger role in the day-to-day management of the criminal activity. The Second Circuit held that the court’s conclusion that defendant was not a leader was incorrect as a matter of law. Defendant was the owner of the dealership and he was an active participant in the criminal activity at the dealership. He was responsible for laundering $832,000. Defendant was also ultimately responsible for hiring and supervising the other conspirators in this case, and as owner of the dealership, he was a principal beneficiary of the improper auto sales. U.S. v. Wisniewski, 121 F.3d 54 (2d Cir. 1997).
2nd Circuit rejects claim that defendant was coerced by mobster. (431) Defendant was convicted of RICO charges, wire fraud and money laundering in connection with illegal dumping at a landfill. He challenged a § 3B1.1(a) enhancement, claiming that the real manager of the criminal activity was a high-ranking member of a crime family, and that his own apparent authority derived from this mobster’s “duress, coercion and blackmail.” The Second Circuit agreed that defendant’s coercion claim was frivolous. Defendant had participated in robbing this mobster of money, which did not show fear. Also, he had initiated communications with another crime operation, which also showed his lack of fear of organized crime. The district court correctly disregarded defendant’s allegation that the mobster was the true leader of the scheme. However, it failed to make findings with respect to whether the scheme involved five or more participants or was otherwise extensive. Without such a finding, a § 3B1.1(c) enhancement was more appropriate. U.S. v. Zagari, 111 F.3d 307 (2d Cir. 1997).
2nd Circuit upholds role increase for attorney in contractor kickback scheme. (431) Defendant, a union attorney, was involved in a scheme in which a contractor hired to renovate a building for the union kicked back a large portion of the fees to union officials and defendant. He pled guilty to embezzling union funds. The Second Circuit agreed that defendant acted as a manager or supervisor of the embezzlement scheme. He hired the contractor, and actively directed him on how to revise the bid so as to increase the amount of kickbacks. U.S. v. Pollack, 91 F.3d 331 (2d Cir. 1996).
2nd Circuit holds that drug broker did not play minor role. (431) Defendant pled guilty to a drug conspiracy after brokering a heroin transaction. The Second Circuit found his claim for a minor role adjustment bordered on the frivolous. Acting as broker for the two kilogram heroin transaction, defendant put together the buyer and seller. He also delivered the heroin and picked up the money from the sale of the heroin. U.S. v. Imtiaz, 81 F.3d 262 (2d Cir. 1996).
2nd Circuit holds that supervisor inspector was leader of bribery scheme. (431) Defendant was the supervising inspector of one of the Taxi and Limousine Commission’s inspection stations. The facility was corrupt, and bribes were regularly paid to line inspectors and their supervisors to rig inspection results. The Second Circuit agreed that defendant was a leader in the bribery scheme. He was the highest ranking authority at the inspection station, and exercised control over it. His position at the inspection station and his participation in the conspiracy allowed his subordinates to understand that bribe-taking was an institutional practice, and that they had high-ranking protection for their jobs. Moreover, defendant was responsible for assigning inspectors to specific lanes, and took care to assign corrupt inspectors to work together. U.S. v. DeRiggi, 72 F.3d 7 (2d Cir. 1995).
2nd Circuit agrees that defendant’s accountant was participant in tax fraud. (431) Defendant and six others, including his wife and brothers, conspired to commit tax and mail fraud. The Second Circuit upheld a § 3B1.1(c) enhancement, finding defendant’s accountant was a criminal participant who was controlled by defendant. The accountant, who had previous experience as an IRS auditor, received defendant’s financial statements and prepared his tax returns. The accountant knew that certain of defendant’s income was not reported on the tax returns because he was person who did not place the amounts on the returns. The accountant was not an unwitting participant. Defendant also supervised the accountant. Defendant hired the accountant, supplied records to him and directed his preparation of returns. It was irrelevant that at times others may also have directed the accountant. U.S. v. Brinkworth, 68 F.3d 633 (2d Cir. 1995).
2nd Circuit says defendant need only manage one other person for § 3B1.1(b) enhancement. (431) Defendant challenged a § 3B1.1(b) enhancement since the evidence did not show that he supervised five people. The Second Circuit held that § 3B1.1(b) is satisfied if the defendant was a manager of supervisor and the criminal activity itself involved at least five participants; the defendant need not be the manager of more than one other person. Here, six persons other than defendant packaged and/or sold drugs from an apartment. Defendant recruited one of them and paid her and three others to sell his crack. Defendant was responsible for most of the crack sales at the apartment. U.S. v. Payne, 63 F.3d 1200 (2d Cir. 1995).
2nd Circuit upholds organizer enhancement for “moving force” behind burglary scheme. (431) Defendant and his associates were involved in five break-ins of banks and department stores. The Second Circuit affirmed an organizer enhancement because defendant was the “moving force” behind the scheme. He was in charge of the explosives and came up with the idea to use them to open safes. He was in charge of disabling the alarm systems. Evidence collected from his home, including maps, suggested that he was largely responsible for selecting the targets. U.S. v. Mortimer, 52 F.3d 429 (2d Cir. 1995).
2nd Circuit agrees that defendant was leader of bribery scheme. (431) Defendant was the president of a real estate development and investment corporation. He was convicted of making corrupt payments to the local mayor in return for favorable treatment by the city. The Second Circuit upheld a leadership enhancement under 3B1.1(a). The record did not support defendant’s claim that he was merely a passive participant in the corruption scheme. Defendant was the president of the corporation through which the corrupt payments were made. Defendant’s claim that he was unaware of the payments was directly contradicted by the testimony of his two partners. Moreover, defendant was licensed to deal in real estate and was frequently the central figure in the corporation’s real estate ventures. Since the payments generally related to the corporation’s real estate projects, the court could infer that defendant knew and approved the payments. U.S. v. Duncan, 42 F.3d 97 (2d Cir. 1994).
2nd Circuit agrees that owner of company illegally dumping asbestos was supervisor. (431) Defendant and his family were owners of a company that agreed to sell a mill. After an environmental assessment revealed the presence of asbestos, the broker engaged the services of local salvagers to remove two boilers that were covered with asbestos. The asbestos was illegally dumped in a gravel pit in the woods. The broker eventually left after a dispute and defendant paid the workers directly. The 2nd Circuit agreed that defendant was a supervisor of the illegal dumping. After the broker left the mill, defendant was responsible for overseeing the removal of the boilers. He paid the workers and admitted that he had the authority and obligation to stop their work and notify the appropriate authorities of the release of asbestos. However, the § 3B1.1(b) enhancement, appropriate for criminal activity involving five or more participants or activity that is otherwise extensive, was erroneous since the court did not make specific findings to support it. U.S. v. Liebman, 40 F.3d 544 (2nd Cir. 1994).
2nd Circuit agrees that crew members of ship were participants in smuggling aliens. (431) Defendant argued that his conspiracy to smuggle 150 aliens from China to the U.S. in a fishing boat did not involve five participants. The 2nd Circuit disagreed, holding that the ship’s crew members were participants in the smuggling operation. The uncharged crew members made the entire journey from China to the U.S. They directed the passengers to hide below decks from the authorities in South Africa, and told them to lie to authorities in Haiti and the U.S. U.S. v. Fan, 36 F.3d 240 (2nd Cir. 1994).
2nd Circuit finds that defendant did more than simply convey messages from owner to employees. (431) Defendant, an executive officer of a retail grocery store, assisted the owner in evading taxes by skimming profits from the store. He argued that a § 3B1.1(b) enhancement was based on an erroneous interpretation of a “manager or supervisor.” He believed that the district court improperly relied on defendant’s communication of messages from the owner to his subordinates, and confused defendant’s role in the offense with his management position in the grocery’s legitimate business. The 2nd Circuit disagreed. Although the factors cited by defendant would not warrant a § 3B1.1 enhancement, it was not based solely on these factors. Defendant was more than a messenger. He instructed one employee on the procedure for shredding documents, the days of the week to skim funds, which documents to alter, and what to do with the cash. He told another employee how to create a data-altering computer program. Defendant organized their activities in order to further the cash skimming scheme. It was irrelevant that defendant undertook these activities at someone else’s behest. U.S. v. Leonard, 37 F.3d 32 (2nd Cir. 1994).
2nd Circuit upholds leadership enhancement despite presence of another leader in criminal scheme. (431) Defendant argued that the district court imposed a leadership enhancement under §3B1.1(a) without making any factual findings. The 2nd Circuit affirmed the enhancement. In imposing defendant’s sentence, the district court explicitly adopted the factual findings in the presentence report. That report documented defendant’s role, including his recruitment of three couriers and the involvement of three other individuals. One other participant’s role as the “top leader” of the operation did not preclude the application of §3B1.1 to defendant. There can be more than one leader or organizer. U.S. v. Williams, 23 F.3d 629 (2nd Cir. 1994).
2nd Circuit upholds leadership enhancement for stolen goods conspiracy. (431) Defendant was convicted of conspiracy to receive and resell stolen goods, primarily silver and gold. The 2nd Circuit upheld an enhancement under section 3B1.1(a) for defendant’s leadership or organizer role in extensive criminal activity. The record showed that defendant recruited one conspirator, gave him instructions, and ensured that a government agent posing as a seller provided money to give to another man. Notwithstanding the jury’s acquittal of one conspirator, the court was entitled to view this conspirator as one of defendant’s assistants who would accept stolen goods and meet sources as directed by defendant. Defendant also apparently had a sufficiently large organization to permit him to deal in a variety of contraband goods. U.S. v. Rosa, 11 F.3d 315 (2nd Cir. 1993).
2nd Circuit upholds leadership role even though defendant did not participate in one drug transaction. (431) The 2nd Circuit upheld a leadership enhancement based on voluminous evidence about defendant’s involvement in the conspiracy. Defendant gave workers instructions, paid salaries, collected drug proceeds, disbursed money for bills, handled customers, and maintained the organization’s drug records. The fact that defendant did not participate in the negotiations with an undercover agent did not, by itself, show that defendant did not have a leadership role in the conspiracy. U.S. v. Valdez, 16 F.3d 1324 (2nd Cir. 1994).
2nd Circuit upholds supervisor role for weighing and packaging drugs and having marked money. (431) Defendant was arrested after he and a co-conspirator sold drugs to an undercover agent. The 2nd Circuit upheld a supervisory role enhancement under section 3B1.1(c) based on evidence that defendant weighed and packaged the cocaine sold to the undercover agent. Also, at the time of his arrest, he possessed $80 of the $90 of prerecorded money used by the officer to purchase the cocaine from defendant and his co-conspirator. U.S. v. Castillo, 14 F.3d 802 (2nd Cir. 1994).
2nd Circuit refuses to decide whether defendant must control five or more participants. (431) The 2nd Circuit upheld a upward adjustment under section 3B1.1(a) based on defendant’s leadership role in a criminal activity that involved five or more participants. Since the record was replete with evidence that defendant was the leader of at least five participants in each conspiracy in which he was involved, the court declined to decide whether, as the government contended, section 3B1.1(a) is applicable whenever five or more participants are involved in the criminal activity in which defendant is the organizer or leader, regardless of how many defendant personally organized or led. U.S. v. Wilson, 11 F.3d 346 (2nd Cir. 1993).
2nd Circuit upholds conclusion that defendant was “organizer.” (431) Defendant was sentenced in connection with a counterfeiting operation in which he had helped bring another into the conspiracy, stored paper in his garage, obtained a van used to transport the paper, helped transport the paper, and remained at the office where the printing was being done. On these facts, the 2nd Circuit upheld the enhancement of defendant’s sentence by two levels for being an “organizer.” U.S. v. Boothe, 994 F.2d 63 (2nd Cir. 1993).
2nd Circuit says court must impose three level supervisor enhancement. (431) The district court found that defendant was a supervisor of a group with more than five participants which was otherwise extensive. Nonetheless, the court only imposed a two level enhancement, rather than the three levels required by section 3B1.1(b). The 2nd Circuit reversed, holding that the court had no discretion to limit the increase to two steps. There were no grounds for a downward departure. The suggestion that defendant lacked a sufficient commitment to the organization’s affairs was belied by the court’s findings that defendant was the leader’s trusted “right hand man.” The lack of evidence that defendant was to profit more than the others was an impermissible basis for departure in light of the Commission’s explicit consideration of the profit factor in its commentary to section 3B1.1. The finding that defendant was not more likely to recidivate was not a permissible ground for departure. Judge Pratt dissented. U.S. v. Farah, 991 F.2d 1065 (2nd Cir. 1993).
2nd Circuit upholds leadership role for involvement in stolen auto conspiracy. (431) Defendant was convicted of various charges relating to his involvement in three gunpoint robberies of automobile parking garages. The 2nd Circuit affirmed a four point leadership enhancement under section 3A1.1(a) based upon evidence that defendant planned those robberies in which he was involved, that he recruited accomplices, and that he had an “option” on the stolen automobiles of his choice. That members of the conspiracy committed other crimes in which defendant was not involved did not lessen his leadership role in the offenses of conviction. U.S. v. Espinal, 981 F.2d 664 (2nd Cir. 1992).
2nd Circuit upholds managerial enhancement based upon co-conspirator’s testimony and telephone and drug records. (431) Defendant worked at one of the “spots” from which a large drug organization sold heroin. He contended that he was not a manager in the organization, citing as evidence the fact that he never received any of the expensive gifts that the leader of the organization gave to his managers. The 2nd Circuit upheld the enhancement, in light of testimony by one co-conspirator (who was in charge of the distribution of heroin and collection of sales proceeds) that defendant was in charge of the organization’s spot at 156th and Courtlandt, mobile telephone records reflecting about 60 phone calls from this co-conspirator to defendant, another co-conspirator’s testimony that he was introduced to defendant as one of the people running the spot at 156th and Courtlandt, and an abbreviation of defendant’s name found in the leader’s handwritten drug records. U.S. v. Rivera, 971 F.2d 876 (2nd Cir. 1992).
2nd Circuit affirms that supplier held leadership role over drug distributor. (431) The 2nd Circuit affirmed that defendant was the organizer of a conspiracy to sell cocaine to an undercover agent, even though defendant never sold cocaine directly to the agent. Defendant was the supplier for a distributor who sold cocaine to the agent. At one point the agent was unable to purchase cocaine from the distributor because defendant chose to sell the cocaine to other buyers instead. The amount of cocaine available for sale to the agent directly depended on the timing of defendant’s trips to New York. Defendant set the price for the cocaine sold to the agent. Defendant approved alternate arrangements when the agent refused to “front” the distributor the money for a large purchase. Defendant was responsible for weighing and packaging the cocaine, including those packages sold to the undercover agent. U.S. v. Beaulieau, 959 F.2d 375 (2nd Cir. 1992).
2nd Circuit upholds leadership role of defendant who conducted drug negotiations. (431) The 2nd Circuit upheld a four-level leadership enhancement under guideline section 3B1.1(a). The trial testimony showed that defendant conducted the negotiations regarding price, quantity and location of the drug transaction, he was the individual introduced to a government agent posing as a drug seller, and that on the night of the arrest, he led the agent to two separate cars to display the purchase money. U.S. v. Pitre, 960 F.2d 1112 (2nd Cir. 1992).
2nd Circuit finds that RICO defendant was organizer or leader of criminal activity. (431) The 2nd Circuit affirmed a four point enhancement of a RICO role as an organizer of criminal activity under § 3B1.1(a) based upon the evidence at trial which established that the defendant supervised a number of people while extorting money from New York City restaurants in violation of the Hobbs Act. U.S. v. Tillem, 906 F.2d 814 (2nd Cir. 1990).
2nd Circuit upholds finding that defendant was an “organizer” of an offense. (431) Defendant planned the details of a robbery, recruited his friends as accomplices, assigned roles in the offense and controlled distribution of the loot. Under these facts, the 2nd Circuit held that the district court correctly determined that defendant was an “organizer” in the offense. U.S. v. Parker, 903 F.2d 91 (2nd Cir. 1990).
2nd Circuit upholds finding that defendant was a “leader” of the drug conspiracy because he negotiated the first sale. (431) Defendant was the principal negotiator of the first shipment in a drug conspiracy, and “operated in a fashion to facilitate” other shipments by introducing agents to co-conspirators. Based on these facts the 2nd Circuit held that the finding that defendant was a “manager, leader or supervisor” of a drug conspiracy was not clearly erroneous. U.S. v. Alvarado, 898 F.2d 987 (5th Cir. 1990).
2nd Circuit affirms ruling that defendant was the leader of drug operation. (431) Defendant negotiated a drug sale with a government informant, sold him the drugs and collected the money, gave money and drugs to a contact who introduced the informant, directed another in a drug sale and brought a kilo of cocaine to the apartment where sales took place. Based on these facts, the 2nd Circuit held that the finding that defendant was a “manager, organizer or leader” was not clearly erroneous. U.S. v. Rodriguez-Gonzalez, 899 F.2d 177 (2nd Cir. 1990).
3rd Circuit reverses supervisor increase for lack of findings on employee’s criminal responsibility. (431) Defendant, a cardiologist, was convicted of fraud based on reports he signed that were submitted by claimants to The Fen-Phen Settlement Trust, which paid compensation to class members who sustained heart damage from using Fen-Phen. The district court found that defendant was a “supervisor” under § 3B1.1(c) because defendant employed a non-physician technologist to read echocardiograms, and then prepared and signed a physician’s echocardiogram report falsely implying or asserting that the conclusions were the result of his own observations. However, the district court failed to find that the technologist had the requisite mens rea to be deemed criminally responsible. The Third Circuit held that the absence of such a finding was plain error, and reversed the §3B1.1 enhancement. U.S. v. Tai, __ F.3d __ (3d Cir. Apr. 30, 2014) No. 13-1998.
3rd Circuit affirms aggravating role for owner of website that sold prescription drugs. (431) Defendant owned and operated websites that sold prescription drugs, including controlled substances, over the Internet. He was convicted of conspiracy to distribute controlled substances and conspiracy to introduce misbranded drugs into interstate commerce. The district court applied a four-level aggravating role enhancement because the evidence established that defendant was the owner, operator, and leader of the website, that he controlled the business, and that he hired or entered into agreements with doctors, the pharmacy, and his employees to support the business. Defendant argued that he lacked control over the doctors he hired, who acted independently in evaluating the customer questionnaires and determining whether to issue prescriptions. The Third Circuit upheld the enhancement. The fact that the doctors exercised their own professional judgment in the context of their work for defendant did not alter the fact that, ultimately, they were recruited by, hired by, and answerable to defendant. U.S. v. Spence, 742 F.3d 77 (3d Cir. 2014).
3rd Circuit says courier who could not provide corroboration for limited role was not per se barred from receiving reduction. (431) Defendant, a drug “mule,” was convicted of drug importation. Although the probation office recommended that he be given a minor role reduction, the district court refused to grant it to him, reasoning that, while there were several people involved in the importation scheme, in the absence of evidence as to the relative roles of the others, defendant had failed to meet his burden of establishing entitlement to the adjustment. The Third Circuit held that the court erred in stating that as a matter of law a defendant who cannot provide corroboration for his statements can never meet the minor participant burden of proof. This would be tantamount to saying that those actors with the least knowledge would never be able to qualify for the minor role reduction. While a district court is not required to credit the defendant’s statement about his own role in a criminal enterprise, it may credit such statements and may, given the totality of the circumstances, make a factual determination that such statements do meet the defendant’s burden of proof. Other factors for the court to consider are the importance of the defendant’s actions to the success of the venture, and the defendant’s awareness of the nature and scope of the criminal enterprise. The court made no evaluation of these issues. U.S. v. Rodriguez, 342 F.3d 296 (3d Cir. 2003).
3rd Circuit holds that defendant’s participation in asbestos cleanup was sufficient for leadership increase. (431) Defendant pled guilty to violating the Clean Air Act based on his attempt to illegally remove and dump asbestos from a building he owned. He challenged a § 3B1.1(c) leadership increase because he merely directed his handyman to clean up the building with brooms, sledges and hefty trash bags. The Third Circuit found this sufficient to support the § 3B1.1(c) increase. Defendant ordered Turner to clean up the building. Later, he asked the handyman to help. Then, defendant worked with the handyman and Turner to dump the asbestos at various sites in the city. Defendant’s participation in the cleanup indicated that he was in a position to exercise supervisory control over both the handyman and Turner. U.S. v. Chau, 293 F.3d 96 (3d Cir. 2002).
3rd Circuit agrees that defendant held leadership role in scheme to steal money from airport parking lot. (431) Defendant was involved in a scheme to steal parking fees from the airport. Flannery, Million and the parking lot cashiers testified that defendant was one of the four leaders of the scheme. Million described defendant as the “second man in command” under Gricco, and one cashier testified that defendant was in charge when Gricco was not present. Although Flannery came up with the ticket-swapping plan and initially approached Million and Gricco to participate, Flannery testified that defendant was involved in discussions regarding the development and expansion of the scheme. Defendant was also involved in the enlistment and training of cashiers and was present when at least one cashier was recruited. He helped distribute the counterfeit tickets to the cashiers and often collected the money at the end of the day. Defendant received the same amount of unlawful proceeds as Gricco, Million and Flannery. The Third Circuit ruled that this evidence supported a § 3B1.1(a) leadership role increase. U.S. v. Gricco, 277 F.3d 339 (3d Cir. 2002).
3rd Circuit says defendant held leadership role in both fraud and money laundering counts. (431) Defendant, the owner of a vocational school, manipulated the loan default rate of the school’s students by submitting false documents to lenders and making payments on behalf of student borrowers on the verge of default. He was convicted of fraud and money laundering, which the court grouped together because they involved the same victim. After grouping, the district court added a two-level leadership enhancement. Defendant argued that he played no leadership role in the money laundering, and that the leadership increase should have been applied to his fraud count before the grouping. The Third Circuit found no error, since even if the court should have determined the applicability of the adjustment before grouping, there was sufficient evidence to support a leadership adjustment on both the fraud and money laundering counts. Defendant instructed two school employees to submit fraudulent deferment and forbearance forms and to mail checks on behalf of student borrowers who were nearing default. It was the funds derived from those fraudulent activities that were “laundered” within the meaning of § 1957 and used to promote additional fraud. U.S. v. Cefaratti, 221 F.3d 502 (3d Cir. 2000).
3rd Circuit holds that three participants plus five non-participants made scheme otherwise extensive. (431) Defendant embezzled money from a profit sharing plan, and engaged two lawyers to create false documents indicating that the withdrawals were part of a lawful employee stock ownership plan. In applying a § 3B1.1(a) leadership enhancement, the district court found that the scheme was “otherwise extensive” by counting the three participants plus six non-participants. The Third Circuit agreed that five of the six listed non-participants could be counted, and concluded that the combination of three participants and five countable non-participants made the scheme “otherwise extensive.” Defendant used the services of Katz and Grikis to convert an account held by the plan trustee into an account from which he could withdraw funds. These activities were distinguishable from those of other banking employees who simply moved money for defendant. The court also correctly counted the activities of Mayle, Santora and Thomas, who helped defendant hide his criminal activities. However, the court erred in counting Kaminer. Defendant directed Kaminer to write a false letter, but defendant never used the letter, and thus Kaminer’s conduct was not “peculiar and necessary” to defendant’s criminal activity. U.S. v. Helbling, 209 F.3d 226 (3d Cir. 2000).
3rd Circuit holds that defendant held leadership role in embezzlement scheme. (431) Defendant embezzled money from a profit sharing plan to pay the operating expenses of three failing companies he owned, and engaged two lawyers to create false documents indicating that the withdrawals had been part of a lawful employee stock ownership plan. The Third Circuit held that defendant was an organizer or leader of the embezzlement conspiracy. Defendant recruited all of the participants, including his attorneys, to help him in his criminal activity. The district court properly found that defendant had a criminal purpose in recruiting the attorneys, that he controlled their activities in orchestrating the scheme through them, and that he was more culpable than they were. Evidence that certain individuals provided expertise or planning does not necessarily counter evidence that their actions were controlled by another. U.S. v. Helbling, 209 F.3d 226 (3d Cir. 2000).
3rd Circuit holds that fraud scheme was otherwise extensive. (431) Defendant perpetrated the largest charity fraud in history, a six-year scheme in which he solicited over $350 million in contributions for a bogus “matching” program. The Third Circuit affirmed a § 3B1.1(a) enhancement for being the leader of an “otherwise extensive” criminal enterprise. In addition to enlisting his accountant’s services, defendant used the staff of his corporation to perpetrate the extensive fraud. The district court’s sentencing memo identified by name seven employees who unwittingly and at defendant’s direction contributed to the scheme by withholding requested documents and information from investors. Defendant hired several attorneys and accountants to prepare reports based on false information that defendant had given them, and they used their imprimatur of propriety to pass off the corporation as a legitimate charitable organization. In all, the district court counted at least 13 innocent individuals who defendant used in the crime. U.S. v. Bennett, 161 F.3d 171 (3d Cir. 1998).
3rd Circuit holds that defendant was leader of importation scheme. (431) Defendant conspired to import more than 500 grams of cocaine into the U.S. The Third Circuit agreed that defendant, rather than the associate who transported the cocaine from Panama, was the leader of the conspiracy. The telephone conversations between defendant and the associate concerned only the associate delivering the cocaine to defendant. They did not discuss splitting profits derived from the cocaine’s sale or selling the cocaine jointly. Also, defendant arranged for his contacts in Panama to supply the associate with a kilogram of cocaine. Finally, the associate testified that defendant was to pay him $500 for his services as a courier. The district court found the associate’s statement to be credible. U.S. v. Bethancourt, 65 F.3d 1074 (3d Cir. 1995).
3rd Circuit agrees that IRS agent held supervisory role in bribery scheme. (431) Defendant, an IRS agent, was convicted of demanding and receiving bribes and illegal gratuities to “fix” taxpayers’ problems with the IRS. The Third Circuit upheld a supervisorial enhancement even though the record supporting the enhancement was not extensive and neither the prosecution nor the defense thought the increase was appropriate. Several uncontested facts in the PSR supported the conclusion that defendant supervised a co-worker. First, defendant made all initial contacts with the victims of the fraud. Second, the co-worker performed much of the menial work of the scheme, driving defendant to meetings with the victims, taking notes during those meetings, and amending the victims’ tax returns. Although defendant was legally blind and thus unable to perform these tasks, these activities showed some authority over the co-worker. Finally, defendant was involved in more incidents than his co-worker, suggesting that it was defendant’s scheme and that defendant recruited the co-worker. U.S. v. Felton, 55 F.3d 861 (3d Cir. 1995).
3rd Circuit upholds leadership increase even though defendant did not participate in sale of guns. (431) Defendant and others conspired to illegally purchase, transport and sell firearms. He challenged a § 3B1.1(a) leadership enhancement since there was no evidence that he actually participated in the purchase, transportation or sale of the guns. The Third Circuit upheld the enhancement, finding that leadership is not inconsistent with a refusal to participate in the actual implementation of a criminal plan. Defendant bankrolled a large part of the gun purchasing program, took possession of some of the weapons after they were purchased, assumed control over the shipments when they arrived at their destination, and identified buyers for the weapons. U.S. v. Bass, 54 F.3d 125 (3d Cir. 1995).
3rd Circuit upholds managerial increase even though defendant did not receive bulk of profits. (431) Defendant and others conspired to use unauthorized credit cards. The Third Circuit upheld a § 3B1.1(c) managerial enhancement, even though defendant led a “low-income lifestyle” and did not receive a substantial portion of the conspiracy’s $321,000 illegal profits. Although defendant’s lifestyle weighed against the enhancement, the record as a whole supported it. Defendant recruited two accomplices, received credit card information from them and others, used the data to place orders for merchandise, created fictitious distributors, and signed fraudulent credit card slips. U.S. v. Hunter, 52 F.3d 489 (3d Cir. 1995).
3rd Circuit approves supervisor enhancement for defendant who directed young man to deliver heroin package to informant. (431) Defendant sold heroin to an informant. The 3rd Circuit approved a supervisor enhancement based on evidence that defendant directed a young man or boy, whom defendant identified as his nephew, to deliver the heroin to the informant. Defendant then criticized the boy for being too open in his manner of handling the package. This evidence, although not overwhelming, was sufficient to support the enhancement. U.S. v. Fields, 39 F.3d 439 (3rd Cir. 1994).
3rd Circuit upholds organizer role in stolen savings bond scheme. (431) Defendant sold stolen government savings bonds to a government informant. He contended that the court erred in increasing his offense level as an organizer under § 3B1.1(c) because the government agent could not be a participant in the scheme. The 3rd Circuit affirmed based on defendant’s control over his co-defendant. Defendant recruited his co-defendant to assist him in selling the bonds, directed the co-defendant to deliver the first batch of 20 bonds to the government agent, and planned the mechanics of the exchange of the additional bonds. Even if a government agent masterminded the scheme to sell the bonds, that did not detract from the evidence that defendant directed his co-defendant’s role in the scheme. U.S. v. King, 21 F.3d 1302 (3d Cir. 1994).
3rd Circuit applies leadership enhancement to source of drug distribution ring. (431) The 3rd Circuit affirmed a four level enhancement under guideline section 3B1.1 for defendant’s leadership role in a drug distribution ring. Defendant was the source of cocaine for the group, which included five or more people. He chose the times when he would travel to Philadelphia and he recruited people to travel with him. Once he obtained the cocaine, defendant was responsible for storing it at two different locations until it was needed for distribution. When defendant’s supply was gone, he directed buyers to another co-conspirator. The court found that defendant was equally culpable with the other co-conspirator as an organizer of the distribution scheme. Judge Rosenn dissented, since there was no evidence that defendant exercised any control over the co-conspirator or any member of the co-conspirator’s drug ring. U.S. v. Phillips, 959 F.2d 1187 (3rd Cir. 1992).
3rd Circuit upholds leadership role of defendant who supplied cocaine and recruited co-defendant. (431) The 3rd Circuit upheld a two point enhancement based on defendant’s aggravating role in the drug offense. Evidence at trial showed that defendant supplied the cocaine that a co-defendant sold to an undercover agent and that he recruited another co-defendant for surveillance purposes. U.S. v. Salmon, 944 F.2d 1106 (3rd Cir. 1991).
3rd Circuit upholds finding that people were “participants” in underlying conduct which facilitated offense. (431) Defendant attempted to extort $10 million from DuPont by threatening to use stolen proprietary information to compete with them. Defendant contended that his offense did not involve five or more participants, and therefore it was improper to increase his offense level by four based upon his leadership role. The 3rd Circuit upheld the enhancement, finding that participants include persons who are used to facilitate a criminal scheme. The three people who stole the proprietary information and used it to design a plant for defendant were “participants” under guideline § 3B1.1(a). That the evidence was insufficient to convict them of extortion was not controlling, as long as their own criminal conduct made the scheme possible. One other individual was a participant because he interviewed DuPont employees that defendant sought to hire. Another individual was a participant because he permitted his home to be used as headquarters for the conspiracy, and his presence gave the deal credence in the eyes of others. U.S. v. Inigo, 925 F.2d 641 (3rd Cir. 1991).
3rd Circuit determines that defendant who handled negotiations with undercover agent was leader or supervisor. (431) The 3rd Circuit rejected defendant’s argument that he should not have received a two level increase in offense level based on the finding that he was a leader or supervisor of a drug conspiracy. There was “ample” evidence in the record to support the district court’s determination. Defendant handled the original negotiations with an undercover agent and determined both the location and the price of the drugs. Defendant eventually reached an agreement with the undercover agent, used another defendant as an intermediary and had another defendant bring the cocaine to him so that he could complete the sale. U.S. v. Gonzalez, 918 F.2d 1129 (3rd Cir. 1990).
3rd Circuit holds defendant’s role in making contacts and providing supplies made him a “manager”. (431) Defendant made initial contact with undercover agent in a scheme to print counterfeit currency, provided the paper to print the currency, attempted to obtain false I.D. and “silencers” for guns, and paid for “silencers” sold to him. Based on these facts, the district court properly concluded defendant was a manager or supervisor in commission of the offenses. U.S. v. Wickstrom, 893 F.2d 30 (3rd Cir. 1989).
4th Circuit applies “manager” increase to patrolman who used police vehicle to protect co-conspirators. (431) Defendant, a highway patrolman, participated in a conspiracy involving large-scale cultivation of marijuana. Defendant purchased property and allowed co-conspirators to grow marijuana on the property in exchange for a share of the profit. The Fourth Circuit ruled that the district court did not clearly err in applying a three-level managerial role enhancement. Defendant used his police vehicle on two occasions to follow co-conspirator Verdugo, who was transporting marijuana in a separate vehicle. Defendant’s purpose was “to prevent any other law enforcement agency from stopping” Verdugo’s vehicle. His decision to shield Verdugo’s acts by using his patrol car was a management decision about the manner in which another conspirator was to conduct the conspiracy’s business. Moreover, defendant transferred the electric bill for the property from his own name to that of Verdugo. This act, which concealed defendant’s role in the operation, also reflected an exercise of authority over Verdugo. U.S. v. Steffen, 741 F.3d 411 (4th Cir. 2013).
4th Circuit agrees defendant held managerial role in stolen check scheme. (431) Defendant and several co-conspirators operated an elaborate scheme to steal and process unauthorized credit card convenience checks. The Fourth Circuit upheld a three-level enhancement for defendant’s aggravated role as a manager or supervisor in the offense under § 3B1.1(b). Defendant was intimately involved in planning and organizing the offense and making key decisions. He frequently obtained convenience checks and supplied both the checks and student account information to runners, instructing them on what to do upon entering a bank. Co-conspirators testified that defendant supervised their actions on multiple occasions. Moreover, defendant regularly decided where, when, and in what amounts the various transactions would be performed. Moreover, defendant recruited others to join the scheme and taught them the basics of how it operated. U.S. v. Otuya, 720 F.3d 183 (4th Cir. 2013).
4th Circuit upholds leadership increase for attorney who drafted paperwork and was critical in recruiting investors. (431) Defendant and others designed a tax fraud scheme to solicit others to invest in partnerships in order to benefit from tax deductions available to the partnership. The Fourth Circuit upheld a § 3B1.1(a) increase, finding more than sufficient evidence in the record to support the court’s finding that defendant was an organizer or leader. First, defendant, who was an attorney and performed the legal work to carry out the conspiracy, drafted the paperwork, and designed the paperwork to take advantage of the tax deduction. Second, defendant was critical to the recruitment of investors, providing conspirators with instructions regarding the substance of the phony cover story to describe the investment. Defendant was held out as the “expert” to address investors’ questions and concerns. Third, defendant supervised and directed collection of paperwork and supporting data necessary to document and consummate the fraudulent transactions. Finally, when the IRS had initiated an audit of one of their investors, the conspirators turned to defendant for assurances and instructions on how to proceed. U.S. v. Thorson, 633 F.3d 312 (4th Cir. 2011).
4th Circuit approves three-level managerial increase for manager of call center. (431) Defendant was involved in a fraudulent sweepstakes scheme centered in Costa Rica. The Fourth Circuit upheld a three-level managerial role enhancement based on defendant’s role as a “room boss” or “office manager” at the call center. Defendant exercised supervisory responsibility over the activities of the call center by controlling its operators. He enforced the center’s rules and punished employees who failed to abide by them. In passing out “leads,” defendant coordinated the operators’ activities, determining which of the “openers” and “loaders” were to make contact with which victim. Defendant was responsible for calculating each employee’s earnings, effectively deciding monetary shares of the fraud scheme’s proceeds. U.S. v. Llamas, 599 F.3d 381 (4th Cir. 2010).
4th Circuit says that acquittal of conspiracy charges did not bar leadership increase. (431) The district court considered the seven factors referenced in § 3B1.1 and concluded that defendant was the organizer and leader of a drug distribution enterprise that involved as many as eight individuals. The Fourth Circuit found that the record supported this conclusion. Testimony at trial established that defendant maintained contact with drug suppliers and recruited people to work as dealers. Further, defendant controlled how the product was allocated to his dealers and how the money was ultimately divided. The fact that defendant was not convicted for conspiracy did not serve as a per se bar to defendant’s enhancement. U.S. v. Jones, 356 F.3d 529 (4th Cir. 2004).
4th Circuit holds that defendant held leadership role in marriage fraud scheme. (431) Defendant, along with other individuals, engaged in a scheme to procure citizenship and other benefits through the production of false documents and the undertaking of a sham marriage. The Fourth Circuit affirmed a two-point managerial role increase under § 3B1.1(c) based on control over Walker. Defendant exercised direction and control over the entire scheme and was responsible for persuading Walker and others to take part in his crimes. Defendant clearly recruited several individuals to help. Although defendant claimed that he and Walker were “equally culpable” for the marriage fraud, it was apparent from the record that defendant had all of the decision-making power in the relationship. It was defendant who initially proposed the idea of paying Walker to marry him so that he could obtain his green card. When Walker wanted to back out of the scheme shortly before the wedding, defendant threatened to turn her into the police. He also cajoled her into remaining in the marriage by promising her more money. Additionally, defendant guided the entire green card application process. U.S. v. Rashwan, 328 F.3d 160 (4th Cir. 2003).
4th Circuit holds that principal suppliers of crack to housing project were leaders. (431) Defendant and his brother challenged a § 3B1.1(a) leadership increase, arguing that they were merely “street dealers” in a much larger drug distribution apparatus engineered by other parties. However, there was a large quantity of evidence pointing to defendant’s intimate involvement in the distribution of drugs in the Campbell Terrace projects. The same was true for his brother, who seemed to have had an even more active role in the drug trade. The record contained abundant testimony from street dealers who identified the brothers as the principal suppliers of crack cocaine to the streets dealers in the housing projects. Also, two witnesses testified that more than ten people worked for the brothers. In light of this evidence, the Fourth Circuit found that it was not clearly erroneous for the district court to conclude that the brothers had leadership roles in the drug network. U.S. v. Carter, 300 F.3d 415 (4th Cir. 2002).
4th Circuit agrees that defendant was manager of drug and money laundering conspiracies. (431) The Fourth Circuit ruled that the record supported the finding that defendant was a manager or supervisor in the drug and money laundering conspiracies. Defendant controlled the activities of other participants in the drug distribution conspiracy by directing one of his street dealers to identify addresses in West Virginia where packages of marijuana could be sent, and by sending his girlfriend to West Virginia at least once to transport the drugs. From the time defendant became involved in the conspiracy, he “exercised management responsibility” by setting prices and terms of payment, handling proceeds, arranging the logistics of the deliveries, and giving advice to his street dealers on how to market the product. With regard to the money laundering conspiracy, defendant repeatedly directed others to wire transfer proceeds from the drug distribution activities or to receive such transfers of funds on his behalf. U.S. v. Bartley, 230 F.3d 667 (4th Cir. 2000).
4th Circuit holds that killing while in continuing criminal enterprise does not have supervisory element. (431) Defendant was convicted of engaging in a continuing criminal enterprise, intentionally killing an individual while engaging in a continuing criminal enterprise, racketeering and firearms charges. The district court found that defendant had a leadership role in the murder and applied a § 3B1.1(c) enhancement. Defendant argued that the § 3B1.1(c) enhancement was double counting because the associated offense, intentionally killing an individual while engaging in a continuing criminal enterprise, in violation of 21 U.S.C. § 848(e)(1)(A), includes a supervisory role as an element. The Fourth Circuit disagreed. Although conducting a continuing criminal enterprise in violation of § 848 includes a supervisory role as an element, the § 848(e)(1)(A) offense does not. U.S. v. Turner, 198 F.3d 425 (4th Cir. 1999).
4th Circuit says role enhancement should be based on overall RICO conspiracy and all relevant conduct. (431) Defendants were convicted of RICO charges based on their operation of several insurance companies. The district court applied a four-level leadership enhancement to one defendant, and a three-level managerial enhancement to the other defendant. The Eighth Circuit held that the § 3B1.1 adjustment is applied to a RICO offense by looking to the overall RICO conspiracy and all its relevant conduct. Viewed in this light, the district court’s findings that defendants and five other named individuals were criminally responsible for the enterprise’s pattern of racketeering activities was not clearly erroneous. U.S. v. Coon, 187 F.3d 888 (8th Cir. 1999).
4th Circuit denies minor reduction to less culpable defendant who played material role in fraud. (431) Defendant helped a male co-conspirator use fraudulent credit cards with women’s names on them. Although defendant was less culpable than her co-conspirator, the Fourth Circuit found she was not entitled to a minor role reduction because she was “material or essential to the offense.” Defendant not only signed the back of some of the credit cards, but she also accompanied the co-conspirator into various retail establishments where the cards were used. The very point of including defendant in the scheme was to facilitate the co-conspirator’s use of cards with women’s names on them. The cards signed by defendant were used to purchase thousands of dollars worth of goods and services. U.S. v. Akinkoye, 185 F.3d 192 (4th Cir. 1999).
4th Circuit rules defendant was leader or organizer of Freeman. (431) Defendant attempted to use fraudulent financial instruments known as comptroller warrants to satisfy debts to several creditors. He also distributed the warrants to others so that they could attempt to cash them. The district court applied a § 3B1.1(c) supervisorial enhancement. Defendant claimed that since all of the persons to whom he gave the warrants testified that they did not know the warrants were worthless, there were no participants for him to supervise. The Fourth Circuit affirmed the enhancement since at least one of the people defendants supervised knew or should have known that the warrants were fraudulent. This individual testified that although he doubted the validity of the warrants, he attempted to cash them anyway because he needed the money. He also told defendant that defendant could not write a warrant to him personally because they were bad. U.S. v. Wells, 163 F.3d 889 (4th Cir. 1998).
4th Circuit finds witness testimony supported managerial role enhancement. (431) Defendants argued that the district court erred in imposing a § 3B1.1 enhancement for their role in a cocaine conspiracy. The Fourth Circuit found that numerous witnesses provided testimony that supported the enhancements. With regard to the first defendant, a co-conspirator testified that he sold crack for defendant and that another man “cooked” defendant’s crack. This was confirmed by another witness. A third witness testified that six others worked for defendant and two allowed defendant to use their homes for crack distribution. This witness also testified that seven persons worked for the second defendant distributing his crack. Another witness also recounted that she cut an ounce of crack for the second defendant under this defendant’s instructions. Another cohort testified that he worked for the second defendant selling crack and knew of other addicts that worked for him. U.S. v. Sampson, 140 F.3d 585 (4th Cir. 1998).
4th Circuit holds that defendant was leader of drug ring. (431) The district court adjusted defendant’s offense level based on his role as an organizer or leader of a drug ring. Defendant argued that he only had a buyer/seller relationship with his co-defendants. The Fourth Circuit affirmed the role enhancement under § 3B1.1(a) based on evidence that defendant directed the activities of other members of the drug ring and facilitated the criminal enterprise by renting apartments, acquiring pagers, hiring a lawyer for a co-defendant, and paying for the bond of another co-defendant. U.S. v. Perkins, 108 F.3d 512 (4th Cir. 1997).
4th Circuit holds that miners who signed false safety certifications were criminal participants. (431) Defendant paid a mine safety instructor to falsely certify that he provided safety training to the coal miners working for defendant. Defendant required the miners to sign the certifications in order to keep their jobs. He argued that the miners should not count as participants for purposes of a § 3B1.1(a) enhancement for criminal activity involving five or more participants. The Fourth Circuit held that the miners counted as participants. The miners violated the law when they falsely stated on the forms that they received safety training when they did not. Therefore, each one was criminally responsible for the offense, even though not charged with it. U.S. v. Turner, 102 F.3d 1350 (4th Cir. 1996).
4th Circuit says amendment barring managerial enhancement for control over property made substantive change. (431) The district court, relying on U.S. v. Chambers, 985 F.2d 1263 (4th Cir. 1993), applied a § 3B1.1(b) managerial enhancement based on defendant’s control over the collection of money and delivery of drugs. Several months after defendant was sentenced, the Sentencing Commission amended § 3B1.1 on November 1993 by adding a new note 2 stating that a defendant must manage or control other participants in the offense to warrant an enhancement. An upward departure may be warranted for a defendant who did not manage another participant, but who exercised managerial control over the property, assets or activities of a criminal organization. The Fourth Circuit held that despite Commission language to the contrary, the amendment was not a mere clarification because it made a substantive change to the operation of the guideline in the Circuit. Because the amendment made a substantive change to § 3B1.1 and was not listed in § 1B1.10 for retroactive application, defendant was properly sentenced, and could not benefit from the change in the guidelines. U.S. v. Capers, 61 F.3d 1100 (4th Cir. 1995).
4th Circuit agrees that defendant was manager of large drug enterprise. (431) Defendant was convicted of distributing marijuana. The Fourth Circuit agreed that defendant acted as a manager or supervisor of a conspiracy of five or more persons under § 3B1.1(b). Defendant supervised the preparation of marijuana for shipping and sent his inferiors to deliver the drugs. The conspiracy involved more than five persons, including three defendants and several others. Two of the individuals supervised by defendant described his activities in detail. U.S. v. Basher Al-Talib, 55 F.3d 923 (4th Cir. 1995).
4th Circuit says that control is not sole factor to consider in applying leadership enhancement. (431) Defendant argued that the district court erred in enhancing his sentence under § 3B1.1(a) because it did not make a factual finding that he controlled four other persons in the drug conspiracy. The 4th Circuit upheld the enhancement, since control is only one of several factors that a court is to consider in applying the enhancement. The court justified the enhancement based on defendant’s recruiting other people into the conspiracy. The enhancement was proper, even though the court did not distinctly articulate any factors in addition to defendant’s recruitment activities. U.S. v. Harris, 39 F.3d 1262 (4th Cir. 1994).
4th Circuit holds that defendant was organizer of escape from prison. (431) Defendant escaped from a minimum-security prison. A friend picked him up at a predetermined time and place outside the prison and drove him to another state. The 4th Circuit upheld an organizer enhancement under § 3B1.1(c). Defendant was the beneficiary of the escape, and he first proposed the escape to his friend. He persuaded his friend and two others to help with the escape, and he devised many of the details. The fact that the friend also organized the escape did not preclude defendant from receiving the enhancement. U.S. v. Sarno, 24 F.3d 618 (4th Cir. 1994).
4th Circuit affirms that defendant held leadership role in extortion scheme. (431) Posing as a member of an Italian crime family, defendant extorted “protection” money from a wealthy new immigrant. The 4th Circuit upheld a leadership enhancement under section 3B1.1(c). Defendant was clearly the leader or organizer of the conspiracy. He made the original contacts with the victim, he made most of the threatening statements, he collected $75,000, and it was not error to conclude that he directed two others. U.S. v. Bengali, 11 F.3d 1207 (4th Cir. 1993).
4th Circuit upholds managerial role for organizing illegal mussel dives and warning divers of state “crackdown.” (431) In violation of state law, defendant dove for mussels and sold them to a company that processed and exported the mussels to Japan. He was convicted of violating the Lacey Act, which prohibits the transportation, sale or purchase of fish or wildlife obtained in violation of state law. The 4th Circuit upheld an enhancement under section 3B1.1(c) for defendant’s role in the offense, based on evidence that defendant organized many mussel dives, informed several divers about the location of the mussel beds, and warned divers of the state’s “crackdown” on the Ohio River. U.S. v. Borden, 10 F.3d 1058 (4th Cir. 1993).
4th Circuit finds major supplier and broker could foresee all drug quantities and were leaders. (431) The 4th Circuit affirmed that defendants’ involvement was sufficiently extensive to hold them accountable for the full amount of drugs. One defendant, was a major supplier of drugs for distribution by other members of the conspiracy, and the second was a heavily-involved broker and sometime middleman supplier. The same evidence supported the court’s determination that the defendants had leader or organizer roles in the conspiracy. U.S. v. Banks, 10 F.3d 1044 (4th Cir. 1993).
4th Circuit holds that defendant organized or led an organization with five or more participants. (431) The 4th Circuit upheld the district court’s finding that defendant organized or led a criminal organization involving five or more participants. Defendant had several recruiters working for him to bring in new people to sell drugs; defendant had put a gun in a co-defendant’s face and threatened to kill him when the co-defendant was not selling enough drugs; another co-defendant acted as defendant’s chauffeur and procurer as well as selling drugs for defendant; defendant supplied drugs to another co-defendant for resale; and defendant used a courier named “Bobby” to transport drugs from New York to Virginia. U.S. v. Falesbork, 5 F.3d 715 (4th Cir. 1993).
4th Circuit affirms supervisor role for “number two man” in conspiracy. (431) The 4th Circuit affirmed an enhancement under section 3B1.1(b) where virtually every witness who knew the inside of the drug conspiracy identified defendant as the “number two man” in the entire operation. U.S. v. Riley, 991 F.2d 120 (4th Cir. 1993).
4th Circuit finds managerial role where defendant managed at least some of the grouped offenses. (431) Defendant argued that the district court improperly enhanced his sentence on counts three through five because he was no longer acting as a manager or supervisor at the time he committed the offenses underlying those counts. The 4th Circuit rejected this argument since the managerial enhancement did not apply to the sentence imposed on individual counts, but was applied to the grouped counts collectively. Under the guidelines, all of the counts that are grouped together are treated as constituting a single offense for purposes of sentencing. U.S. v. Hartzog, 983 F.2d 604 (4th Cir. 1993).
4th Circuit reverses refusal to impose managerial enhancement upon drug “entrepreneur.” (431) The 4th Circuit reversed the district court’s refusal to impose a managerial enhancement upon a drug dealer that the district court described as just “an entrepreneur.” The evidence showed that defendant drove his co-defendant, a 18-year old woman of limited intelligence, to New York, bought the crack by himself, had the co-defendant buy a girdle in which to hide the packages of crack, took her to the bus station and bought her a bus ticket to Norfolk, Va., and then met her in Norfolk and told her to go wait in his car. The appellate court criticized the district court for refusing to apply the enhancement so that defendant would not receive what it viewed as too harsh a sentence. “Attempts, in effect, to manipulate the Guidelines in order to achieve the ‘right result’ in a given case are inconsistent with the Guidelines’ goal of creating uniformity in sentencing.” U.S. v. Harriott, 976 F.2d 198 (4th Cir. 1992).
4th Circuit upholds leadership enhancement despite inappropriate comments. (431) Defendant contended that in imposing a leadership enhancement, the judge was improperly influenced by defendant’s alien status and his personal view that the sentencing guidelines were too lenient. The 4th Circuit affirmed. Although the judge made some inappropriate remarks at sentencing about defendant’s alien status and the lenient sentencing range available under the guidelines, these factors did not influence the sentence. The enhancement was fully supported by the record: defendant secured the location for the counterfeiting enterprise, he obtained money for the printing equipment and accessories, he retained the keys to the house where the operation took place, and five persons were involved in the operation. The judge’s selection of a sentence at the middle of the guideline range, and his lenient sentence of another alien, supported the conclusion that the enhancement was not improperly motivated. U.S. v. Salama, 974 F.2d 520 (4th Cir. 1992).
4th Circuit upholds leadership role for Dilaudid dealer. (431) The 4th Circuit held that the district court’s application of a four-level leadership enhancement under section 3B1.1 was not clearly erroneous. Defendant directed the distribution of Dilaudid by four others. Detailed financial records of drug transactions totaling $26,000 were recovered in one of these distributor’s homes with defendant’s fingerprints on them. While this evidence was not “overwhelming,” it was sufficient. U.S. v. Melton, 970 F.2d 1328 (4th Cir. 1992).
4th Circuit upholds managerial enhancement for defendant who instructed a co-conspirator on selling drugs from defendant’s home. (431) The 4th Circuit upheld a managerial enhancement under guideline section 3B1.1(c) based upon the determination that defendant exercised control over a co-conspirator by providing him with specific instructions on the circumstances under which he could sell narcotics from defendant’s residence. The co-conspirator consummated drug transaction at defendant’s direction, responded to defendant’s instructions during an abduction of another drug dealer, and followed defendant’s instructions to obtain a refund for a delivery of unsatisfactory cocaine. U.S. v. Kincaid, 964 F.2d 325 (4th Cir. 1992).
4th Circuit upholds leadership role of defendant who used lobbyist to bribe legislators. (431) Defendant used a lobbyist to provide state legislators with cash and other bribes to induce them to pass favorable legislation. He challenged a four level enhancement based upon his leadership role in the offense under section 3B1.1(a), claiming that because the lobbyist, rather than he, knew the senators necessary to obtain passage of the legislation, he did not exercise the requisite degree of control over the scheme. The 4th Circuit upheld the enhancement, since even if defendant did rely upon the lobbyist’s contacts, this did not necessarily negate defendant’s leadership role in the bribery scheme. The evidence also supported the district court’s determination that the criminal activity was “otherwise extensive,” since it involved four major participants as well as other lobbyists, legislators and their staffs. U.S. v. Ellis, 951 F.2d 580 (4th Cir. 1991).
4th Circuit affirms that real estate agent had managerial role in fraudulent scheme to obtain HUD-insured loans. (431) Defendant, a real estate agent, assisted two investors in fraudulently obtaining HUD-insured loans by referring individuals to them to purchase certain condominiums. The 4th Circuit affirmed a three-level enhancement based upon his managerial or supervisorial role in the scheme. Without defendant’s introduction and encouragement, the individuals would not have met the co-defendants and would not have purchased the property. Defendant “was an essential link in the conspiracy, managing and supervising and arranging for the deals to be struck.” U.S. v. Barsanti, 943 F.2d 428 (4th Cir. 1991).
No. 90-5341.
4th Circuit affirms organizer role of drug conspirator. (431) The 4th Circuit affirmed a two-level enhancement for defendant’s role as an organizer or supervisor of a drug conspiracy. There was testimony that defendant helped to recruit one of the conspirators, arranged for a person to haul cocaine from New York promised payment to him, and asked another conspirator to go to New York with him. U.S. v. Johnson, 943 F.2d 383 (4th Cir. 1991).
4th Circuit upholds leadership role of defendant who participated in conspiracy until his drug abuse forced him out. (431) The 4th Circuit affirmed that defendant was an organizer of a drug ring involving five or more participants. Defendant was the instigator of the drug ring, and with his partner, organized the conspiracy. Defendant had the contacts who were used in the distribution of the cocaine and necessary to the success of their business. He enjoyed a leadership position in the conspiracy until his personal use of cocaine ended his participation. U.S. v. Richardson, 939 F.2d 135 (4th Cir. 1991).
4th Circuit affirms leadership role for defendant who assumed control of drug business when partner became unreliable. (431) The 4th Circuit affirmed that defendant was a leader of a drug business that involved five or more participants. Defendant’s partner had the initial contacts that were used to distribute cocaine, but defendant was the real leader and without him there would have been nothing to distribute. Although initially defendant was only to provide money and his partner was to acquire and distribute the cocaine, when the partner proved unreliable by using the cocaine instead of selling it, defendant handled purchasing and distribution. After defendant split with the partner, defendant was able to continue to sell an additional 11 kilograms of cocaine, thereby increasing his share of the profits. U.S. v. Richardson, 939 F.2d 135 (4th Cir. 1991).
4th Circuit affirms managerial role for defendant who negotiated bribes. (431) Defendant ran a consulting firm that took bribes from a government defense contractor. Defendant then split the bribes with a government employee who supervised the award of government defense contracts. The 4th Circuit affirmed the determination that defendant was a manager. Defendant “was more than a mere conduit of the bribes. He negotiated with [the government employee] over terms of payment and sent [another government contractor] false invoices for consulting services to enable the company to conceal its corruption.” U.S. v. Muldoon, 931 F.2d 282 (4th Cir. 1991).
4th Circuit affirms managerial status of defendant who controlled money, drugs and residences. (431) Defendant objected to his classification as a manager, arguing that he was a courier. The 4th Circuit upheld defendant’s managerial status based on evidence that defendant controlled the money, drug products and residences where the drug trafficking was performed. U.S. v. Paz, 927 F.2d 176 (4th Cir. 1991), overruling on other grounds recognized by In re Jones, 226 F.3d 328 (4th Cir. 2000).
4th Circuit upholds determination that supplier who organized drug ring was manager or supervisor. (431) Defendant argued that the district court erred in increasing his offense level by three for being a manager or a supervisor because the district court had stated that he did not fit the literal definition of a manager or a supervisor. The 4th Circuit rejected this argument, finding that the district court had made this statement in the context of deciding whether to increase defendant’s offense level by three (as a manager or supervisor) or by four (as an organizer or leader). Defendant was a supplier who travelled from Florida to Maryland to organize various aspects of the distribution of cocaine. Therefore, defendant’s conduct fell within the definition of a manager or supervisor. U.S. v. Engleman, 916 F.2d 182 (4th Cir. 1990).
4th Circuit determines that defendant who sold drugs was organizer. (431) Defendant argued that there was no evidence that his two companions did anything more than accompany him on a trip, and since he was the only participant in the crime, it was improper to find that defendant was an organizer of a conspiracy to distribute cocaine. The 4th Circuit rejected this argument, noting that defendant recruited his companions to travel with him, that defendant was transporting cocaine on the trip, that cocaine and cash were found in the purse of one of his companions, indicating that she was part of the conspiracy, that defendant claimed a larger portion of the money from the drug sales, and that defendant exercised control and authority over his companions while distributing drugs. U.S. v. Smith, 914 F.2d 565 (4th Cir. 1990).
4th Circuit upholds finding that defendant was leader even though government agents are not counted as participants. (431) Defendant’s base offense level was increased by four based on a finding that he was a leader of a criminal activity that involved five or more participants. The district court named five individuals it counted as participants, including an undercover police officer and an undercover informant who was acting at the direction of the government. The 4th Circuit found that neither government agent could be counted as a participant because neither was criminally responsible. However, the record supported a finding that defendant supplied cocaine to at least 17 other individuals who were themselves distributors. Although not identified by name, they were properly considered by the district court, and therefore, the enhancement was not clearly erroneous. U.S. v. Fells, 920 F.2d 1179 (4th Cir. 1990).
4th Circuit holds that facts of case support enhancement for being organizer or leader of drug conspiracy. (431) Applying the “clearly erroneous” standard of review, the 4th Circuit affirmed a four point increase in a drug defendant’s offense level due to his role as an organizer or leader (§ 3B1.1). Here, the defendant was the first family member to distribute marijuana, turned it over to other family members when he decided to “retire,” was instrumental in recruiting other family members into the business, and retained control over the organization by virtue of the fact that he could regulate the availability of marijuana because he was the sole supplier. U.S. v. Sheffer, 896 F.2d 842 (4th Cir. 1990).
5th Circuit approves role increase based on phone calls showing control over co-conspirator. (431) Defendant was involved in a large drug trafficking conspiracy. The district court applied a § 3B1.1(b) enhancement based on its finding that defendant was a manager or supervisor in the conspiracy. The Fifth Circuit found no clear error. From numerous recorded phone conversations between defendant and co-conspirator Price, the district court found “evidence of planning and a degree of control and authority exercised by [defendant] over Price, where Price is reporting to [defendant] how much Price has as far as drugs, and [defendant] is instructing Price on what to do with the drugs.” U.S. v. Akins, 746 F.3d 590 (5th Cir. 2014).
5th Circuit relies on mother’s hearsay statement to support leadership increase. (431) Defendant was convicted of drug charges. He argued that the district court improperly found that he supervised his younger brother TH, pointing to a recorded phone call where he asked TH to retrieve drugs and TH refused. The Fifth Circuit upheld the court’s finding that defendant supervised TH. In the recorded phone calls, defendant stated that, during one incident, he told TH to answer the door when police arrived; he discussed TH taking responsibility for the drugs found during the same incident; and he told his mother to ask TH to lie if the police questioned TH about defendant’s. Perhaps most importantly, at defendant’s trial, a police officer testified that defendant’s mother had told the officer that she threw defendant out of her house for “fighting, bullying … [TH], for making him mule.” While the mother testified at trial that she did not remember making that statement, the court could properly choose to believe the officer’s testimony. U.S. v. Harris, 740 F.3d 956 (5th Cir. 2014).
5th Circuit agrees that defendant held managerial role in health care fraud conspiracy. (431) Defendant was convicted health care fraud charges based on her involvement in The Mobility Store (TMS), a durable medical equipment supplier. The Fifth Circuit upheld a three-level managerial role enhancement. Although the true leader of the criminal enterprise was defendant’s stepfather, Reese, the evidence also demonstrated that defendant played a significant role in the functioning of that enterprise, and that she profited more from it than any participant other than Reese. Defendant knowingly and willingly led others to believe that she was the owner of TMS. She signed Medicare documents, signed and issued paychecks, and sent correspondence as the owner of TMS. It was plausible, in light of the record, that defendant exercised some level of management responsibility over the property, assets, or activities of TMS. U.S. v. St. Junius, 739 F.3d 193 (5th Cir. 2013).
5th Circuit affirms registered nurse’s supervisory role in Medicare fraud scheme. (431) Defendant was involved in a scheme to commit health care fraud through a Medicare provider named Family Healthcare. The district court applied a §3B1.1(c) managerial role increase based on documentation showing defendant held herself out as a person who coordinated and oversaw patient services and beneficiary assessments. The court also relied on evidence that defendant assumed a co-conspirator’s administrative duties in his absence. The Fifth Circuit upheld the enhancement. Although defendant claimed she was merely an RN who worked under the direction of her co-conspirators, the articles of incorporation for Family Healthcare and its Medicare provider application listed defendant as a director/officer of the company. Also, her resume stated that her job responsibilities at Family Healthcare included coordinating and overseeing all patient services provided by agency personnel. Further, the testimony of others who worked with defendant supported the court’s finding that defendant took on a supervisory role. U.S. v. Njoku, 737 F.3d 55 (5th Cir. 2013).
5th Circuit applies supervisor enhancement to defendants who recruited others into conspiracy. (431) Defendants conspired with a claims adjuster to make hundreds of fraudulent claims against the City of Garland, Texas. The district court applied a three-level enhancement under § 3B1.1(b), finding defendants assumed “a supervisory role” in the check-cashing scheme by providing the names of new payees and recruiting others to cash checks. The Fifth Circuit upheld the enhancement. Although defendants were not the ones who conceived of or principally orchestrated the check-cashing scheme, their role was not so minimal as to disqualify them for the enhancement. The district court found that defendants “recruited others to act as persons who would cash checks.” That finding was supported by trial testimony and by evidence that family, friends, and co-workers of defendants ultimately became involved in the scheme. The court was entitled to reject defendants’ testimony to the contrary as self-serving and inconsistent with the other evidence. U.S. v. Brown, 727 F.3d 329 (5th Cir. 2013).
5th Circuit affirms managerial role based on co-conspirators’ statements. (431) A drug dealer organized a crew, including defendant and three other men, to steal about $700,000 and two kilograms of cocaine from a home. A co-conspirator, Delgado, told officials that defendant had recruited him to commit the robbery. Delgado also said defendant appeared to be in charge of the crew during the robbery because defendant would receive calls from an unknown person and then give orders to the other crew members. Defendant’s cousin, another co-conspirator, reported that defendant recruited the cousin to participate in the robbery, and defendant provided him with a handgun to use during the robbery. The cousin was upset at defendant for pointing a gun at a child during the robbery. The Fifth Circuit upheld a § 3C1.1(c) enhancement for defendant’s management role in the robbery. Although the government agreed with defendant’s objection to the role enhancement, this did not make the enhancement error. Defendant objected to the accuracy of the facts in the PSR involving his management role but he did not introduce any rebuttal evidence. The co-conspirators’ detailed accounts in the PSR were reliable because they were consistent with one another. U.S. v. Zuniga, 720 F.3d 587 (5th Cir. 2013).
5th Circuit affirms managerial role for defendant who received wire funds from alien smugglers. (431) Defendant was the front desk clerk at a hotel used to harbor illegal aliens. The Fifth Circuit upheld § 3B1.1(b) enhancement, finding that the unrebutted facts in defendant’s PSR supported the conclusion that defendant was a manager or supervisor of the criminal activity. The PSR stated that defendant received wired monetary payments from alien smugglers that were then used to smuggle, transport, and harbor illegal aliens. Thus, defendant exercised management responsibility over the property of the illegal harboring conspiracy. U.S. v. Chon, 713 F.3d 812 (5th Cir. 2013).
5th Circuit approves leadership increase based on testimony of government case agents. (431) Defendant pled guilty to participating in drug and money laundering conspiracies. The Fifth Circuit held that the testimony of two government case agents at sentencing was sufficient to support an enhancement for being the organizer or leader of a criminal activity. FBI agent St. John testified that defendant was the leader of a drug distribution cell. Additionally, he also stated that defendant directed six other individuals. In further support of this enhancement, DEA agent Zurfas testified that he intercepted a conversation between defendant and Blas during which defendant asked Blas if he was ready to take the helm of the distribution network that defendant had established. Like St. John, Zurfas also stated that defendant directed six to seven other individuals. This testimony, combined with the information contained in defendant’s PSR, established the plausibility of the district court’s decision to apply this enhancement. U.S. v. Marquez, 685 F.3d 501 (5th Cir. 2012).
5th Circuit, en banc, affirms leadership role for owner-operator of trucking company. (431) Defendant was the owner-operator of a trucking company that shipped Mexican produce from Texas to destinations throughout the U.S. She was convicted of drug charges in connection with her use of the trucking business to also transport marijuana. The Fifth Circuit upheld a § 3B1.1(c) managerial role enhancement. Defendant exercised control over a large quantity of drugs and the truck used to transport them. The evidence also showed that she made arrangements for their transportation and delivery. U.S. v. Delgado, 672 F. 3d 320 (5th Cir. 2012) (en banc).
5th Circuit finds defendant held leadership role in drug conspiracy. (431) The district court found that defendant played a leadership role in a drug conspiracy. Testimony at trial showed that he led a transportation cell that was integral to the conspiracy’s operations. He subcontracted drivers and equipment, recruited drivers, paid them less than he owed them (thus keeping a larger portion of the proceeds), recruited and supervised six co-conspirators, instructed drivers on where and when to go and when to call him to check in, and oversaw the distribution of multi-ton quantities of marijuana and several thousand kilos of cocaine. The Fifth Circuit ruled that the district court did not clearly err in finding that defendant was a leader. U.S. v. Cantu-Ramirez, 669 F.3d 619 (5th Cir. 2012).
5th Circuit affirms leadership role in real estate investment fraud. (431) Defendant was convicted of multiple counts of conspiracy, mail fraud, and securities fraud in connection with his operation of a real estate investment company. The Fifth Circuit upheld a four-level leadership enhancement under § 3B1.1(a). Although defendant ran the “mortgage side” of the scheme while his partner Lapin ran the “investor side” with Wigginton working under him, evidence supported the inference that defendant had a degree of control over the other participants because the two sides of the business were not completely independent as defendant contended. Defendant was the president and CEO; he had the right to the largest share of the profits. He ran weekly meetings that Lapin and Wigginton attended, which suggested coordination between the investment and mortgage sides of the operation. In at least one instance, Lapin’s side of the firm compiled packets as instructed by defendant for one of the defendant’s “mortgage side” meetings, suggesting the Lapin’s side of the operation was answerable to defendant. U.S. v. Murray, 648 F.3d 251 (5th Cir. 2011).
5th Circuit applies leadership increase for defendant who ran organization while leader was in prison. (431) Defendant challenged a § 3B1.1(a) leadership enhancement based on his role in a drug and money laundering ring. He argued that he had no decision-making authority and recruited no accomplices. He also alleged that the government did not have evidence of the size of his “share” of the organization. There was evidence, though, that defendant had major responsibility on the financial side of the organization, overseeing the disposition of hundreds of thousands of collars in cash at a time. There was testimony that he largely ran the organization while another conspirator was in prison during much of the 1990s. Defendant was in charge of the group arrested after leaving the “stash house” during the incident that led to the possession with intent to distribute conviction. Finally, there was testimony pointing to his role as an enforcer for the organization. The Fifth Circuit upheld the enhancement. U.S. v. Fernandez, 559 F.3d 303 (5th Cir. 2009).
5th Circuit agrees that defendant was manager of otherwise extensive Medicaid fraud scheme. (431) Defendant, a licensed physician, engaged in a conspiracy to defraud Medicare by falsely certifying that he had personally provided or supervised physical therapy service for patients. He also falsely certified that patients needed motorized wheelchairs and performed unnecessary medical procedures. The Fifth Circuit upheld a § 3B1.1(b) enhancement for being a manager or supervisor (but not an organizer or leader) of a criminal activity that was otherwise extensive. The district court found that defendant had supervised Norman, defendant’s former office manager. Norman’s acquittal did not preclude the district court from finding that she was a criminally responsible participant. During defendant’s trial, a witness testified that Norman paid recruiters for referring patients to defendant’s practice, requested kickbacks from the medical equipment companies, and controlled which recruiters could bring patients to defendant’s office. Another witness testified that Norman received a cash payment of $7-8,000 from a medical equipment company. U.S. v. Mauskar, 557 F.3d 219 (5th Cir. 2009).
5th Circuit agrees that police commission was leader of “otherwise extensive” conspiracy. (431) Defendant, the former police commissioner of a small city in Texas, was convicted of extortion and wire fraud in connection with a traffic ticket scheme. He challenged a § 3B1.1(a) leadership increase, arguing that the scheme, which involved numerous officers of the police department who collected warrant payments and passed them along to defendant through the officer in charge of warrants, was not “otherwise extensive.” The Fifth Circuit disagreed, and upheld the increase. Moreover, the mayor and other city employees were involved (some innocently) in a separate scheme to defraud a federally-funded program designed to provide money to hire new officers. The district court could consider, for the purposes of applying the enhancement, all of the persons implicated in carrying out the offenses, including those who did so unknowingly. See U.S.S.G. § 3B1.1(a), Note 3. U.S. v. Mann, 493 F.3d 484 (5th Cir. 2007).
5th Circuit holds that INS team leader was supervisor of civil rights abuse. (431) Defendants was the team leader for a group of INS deportation officers who were convicted of civil rights violations based on their physical abuse of a detainee who had broken his neck while being apprehended. The Fifth Circuit upheld a § 3B1.1(c) leadership increase. Defendant was the team leader of the INS unit that apprehended the victim. Throughout the day, defendant issued orders to both of his co-defendants. For example, defendant rejected the bus driver’s suggestion that the victim get medical attention before being moved; he ordered the victim moved from his house to the INS van; he ordered the victim moved from the van to the bus; and he communicated with his INS supervisor in San Antonio about the victim’s condition. U.S. v. Gonzales, 436 F.3d 560 (5th Cir. 2006).
5th Circuit finds sufficient evidence that defendant held leadership role in alien smuggling scheme. (431) The Fifth Circuit found sufficient evidence to support the district court’s finding that defendant was a leader or an organizer in an alien smuggling ring. Among other things, defendant’s house in El Salvador was the assembly point for many of the aliens; his wife collected the initial payments for the smuggling fees for many of the aliens; the “pollo” list for this and other smuggling trips were found in defendant’s house in El Salvador; he recruited and hired the driver of the tractor-trailer that transported the aliens; and he was in charge of this particular smuggling expedition. U.S. v. Villanueva, 408 F.3d 193 (5th Cir. 2005).
5th Circuit upholds leadership role in drug and money laundering conspiracies. (431) Defendant was convicted of drug conspiracy and money laundering charges. The Fifth Circuit upheld the district court’s finding that defendant was a leader in the drug and money laundering schemes. As to the drug conspiracy, defendant (1) bought and sold about $12,000 worth of cocaine; (2) used Rucker as a courier to transport hundreds of thousands of dollars and about 100 kilograms of cocaine; (3) hired cooks to convert the cocaine he purchased into crack; and (4) paid another man to use his house to cook cocaine. As to the money laundering scheme, defendant recruited Foreman, paid him $5000 to purchase property for the conspiracy, and continued to exercise control over him by using him as an intermediary with respect to the property. Defendant also recruited Jackson to buy a car in Jackson’s name for defendant’s use. U.S. v. Bringier, 405 F.3d 310 (5th Cir. 2005).
5th Circuit holds that clinic manager held leadership role in insurance fraud scheme. (431) Defendant was convicted of mail fraud stemming from an insurance fraud scheme involving staged automobile accidents. Also involved in the fraud were four law firms and six chiropractic clinics, including one where defendant was employed. She argued that her role was limited to one clinic, and that the evidence showed her minimal participation in directing “victims” to sign for treatments they did not receive. The Fifth Circuit rejected defendant’s efforts to “downplay her role.” Government witnesses testified that defendant managed the clinic where she worked and that she directed the “victim” participants to sign for nonexistent treatments which were then used to support fraudulent insurance settlements. U.S. v. Floyd, 343 F.3d 363 (5th Cir. 2003).
5th Circuit holds that farmer was leader of “otherwise extensive” insurance fraud scheme. (431) Defendant, a farmer, conspired with an insurance adjuster to make fraudulent claims based on acreage he did not plant, both for crop disaster payments from the Farm Service Agency, and on federal reinsurance policies. The Fifth Circuit affirmed a four-level increase for being an organizer or leader of criminal activity. Although the activity did not involve five or more persons, it was “otherwise extensive.” Involved in the fraud were the appraiser, defendant’s father and father-in-law, and numerous unwitting participants, including various federal and local agencies, several insurance companies, the U.S. Postal Service, and private interstate carriers. In addition, defendant clearly had a leadership role in the fraud. Defendant chose which false claims to submit; prepared, signed, and submitted those claims; introduced the insurance adjuster to his father and father-in-law; took 95 percent of the profits, and used the services of countless outsiders. U.S. v. Fullwood, 342 F.3d 409 (5th Cir. 2003).
5th Circuit upholds managerial role increase even though another conspirator initially recruited subordinate. (431) Based on the evidence, the Fifth Circuit found that the district court did not clearly err in finding that defendant held a managerial or supervisory role in the marijuana conspiracy. Defendant directed Barnett in numerous ways. Although Henderson initially recruited Barnett and materially benefited from her storage of the marijuana, it was still possible to characterize defendant as a manager or supervisor. U.S. v. Turner, 319 F.3d 716 (5th Cir. 2003).
5th Circuit holds that cited persons were participants in fraud scheme. (431) Defendant argued that because the PSR described various persons as “victims” they could not be participants in his scheme under § 3B1.1. The Fifth Circuit found persons cited by the district court were participants. The very section of the PSR defendant cited also described defendant’s cohorts as “participants” in his fraudulent schemes. A quick examination of these individuals’ roles confirmed this assessment. One participant staged a break-in and lied to the police, another aided defendant in destroying artwork, another provided an alibi for defendant during the break-in, and the last lied under oath to having observed a break-in. These persons were participants in defendant’s scheme in the true sense of the term. U.S. v. Messervey, 317 F.3d 457 (5th Cir. 2002).
5th Circuit holds that defendant was leader of Internet child pornography ring. (431) Defendant and his wife operated a service that provided a sign-on, screening, and age verification system for subscribes of websites specializing in child pornography. The Fifth Circuit affirmed a § 3B1.1(a) leadership increased based on the following undisputed facts. First, the activity involved at least five knowing participants. Second, the crime involved the transportation, for remuneration, of child pornography all over the world through the Internet. Third, defendant ran the operation – he developed and implemented his company for the purpose of mass marketing child pornography to interested subscribers; he actively recruited webmasters to use his service by promising increased profits by tracking subscribers interested in child pornography; and, if a webmaster failed to follow the rules defendant established, defendant determined whether the webmaster would be cut off from the system. U.S. v. Reedy, 304 F.3d 358 (5th Cir. 2002).
5th Circuit holds that defendants held leadership role in alien smuggling ring. (431) Defendants were part of an operation that paid parents to permit their children to accompany immigrants across the border from Mexico to the U.S. The Border Patrol had a policy of returning families with young children to Mexico rather than detain them and charge them with illegal entry. The Fifth Circuit ruled that the evidence cited in defendants’ PSRs provided an adequate basis for a § 3B1.1 leadership or organizer increase. The evidence showed that defendants were in charge of supplying children for use in the smuggling operation, they recruited accomplices, and they organized others in carrying out the crime. U.S. v. Cabrera, 288 F.3d 163 (5th Cir. 2002).
5th Circuit approves managerial role increase for defendant who supplied crack to several others. (431) The PSR noted that defendant distributed crack cocaine on a large scale basis in Sherman, Texas. The report, based on statements from co-defendants and witnesses, stated that defendant supplied crack cocaine to his brother and three others, who in turn repackaged and resold the crack to other customers. While defendant objected to the enhancement based on his activities, he did not offer evidence that refuted the findings of the PSR. The district court adopted the findings of fact contained in the PSR. The Fifth Circuit found no error in defendant’s receipt of a managerial role enhancement under § 3B1.1. U.S. v. Peters, 283 F.3d 300 (5th Cir. 2002).
5th Circuit affirms leadership role for major drug source. (431) The government established that defendant was a major drug source for the Virgen drug organization. For example, the government presented evidence that persons had attempted to transport a substantial amount of drug money from wholesalers to defendant in California. There was also evidence that defendant suggested that one wholesaler use Madrigal as an alternate source of methamphetamine. Thus, defendant actually introduced Madrigal to the conspiracy. Accordingly, the Fifth Circuit found no error in the imposition of an aggravated role enhancement. U.S. v. Virgen-Moreno, 265 F.3d 276 (5th Cir. 2001).
5th Circuit upholds management increases for drug conspirators. (431) The first defendant managed the conspiracy’s marijuana shipments from Mexico to Texas, while the second defendant controlled the sales of illegal drugs at three different locations. Accordingly, the Fifth Circuit found no clear error in the district court’s conclusion that defendants were managers. U.S. v. Miranda, 248 F.3d 434 (5th Cir. 2001).
5th Circuit upholds leadership role in bank fraud scheme. (431) Defendant was involved in a conspiracy to defraud banks by depositing counterfeit checks into several different bank accounts. The Fifth Circuit found sufficient evidence to support a § 3B1.1(a) leadership or organizer increase. Defendant offered nothing to refute the PSR’s finding that he was an organizer, and that the six named individuals were involved in the scheme. These participants need not have been convicted of the offense. Defendant’s claim that he was not a leader because he “only” received $102,500 (of the $807,100 loss) did little for his argument, since he did not advance any argument that another scheme participant received a greater share of the profits. U.S. v. Dadi, 235 F.3d 945 (5th Cir. 2000).
5th Circuit agrees that unknowing assistance of others made scheme otherwise extensive. (431) Defendant operated an advance fee scheme in which he would agree to obtain funding for clients, but never did so. He challenged a § 3B1.1(a) increase for being an organizer or leader of a criminal activity that involved five participants or was otherwise extensive, since the scheme only involved two co-conspirators. The Fifth Circuit upheld the district court’s finding that the scheme was “otherwise extensive.” In deciding whether a scheme is otherwise extensive, the district court must take into account “all persons involved during the course of the entire offense.” Those who assisted defendant included employees of one financial institution, loan brokers who referred clients to defendants, lawyers who wrote misleading letters of reference for defendant, and those who provided due diligence reports on various projects defendant was supposed to finance. These people contributed to the success of the scheme. U.S. v. Davis, 226 F.3d 346 (5th Cir. 2000).
5th Circuit holds that food stamp scheme was “otherwise extensive.” (431) Defendant received a § 3B1.1(a) leadership enhancement based on his role in a conspiracy that redeemed about $1.5 million in food stamps through three businesses. Defendant challenged the district court’s finding that two of the store’s cashiers were participants. The Fifth Circuit found it unnecessary to resolve this issue, since even if the cashiers were not participants, defendant still directed an “otherwise extensive” scheme to illegally purchase and redeem food stamps. Four conspirators testified that defendant was the leader of the operation and that he merely paid the others for the use of their names or for their assistance. As a result of this operation, defendant kept most of the enormous profits for himself. In light of the record as a whole, defendant was involved in an “otherwise extensive” scheme to defraud the government, and the district court did not clearly err in applying the enhancement. U.S. v. Glinsey, 209 F.3d 386 (5th Cir. 2000).
5th Circuit applies managerial enhancement for role in relevant conduct. (431) Defendant pled guilty to charges stemming from 90 kilograms of marijuana found in her possession during her April 1997 arrest. In November 1997, border patrol agents stopped two couriers carrying 48 kilograms of marijuana. The couriers told the border patrol that they had been recruited by defendant to transport the marijuana to Florida. The Fifth Circuit affirmed a § 3B1.1(c) increase based on defendant’s role in the relevant conduct. First, post-conviction conduct may be considered in determining a defendant’s role in the offense, if that post-conviction conduct is relevant conduct under the guidelines. The introductory commentary for § 3B1.1 says that “the determination of a defendant’s role in the offense is to be made on the basis of all conduct within the scope of 1B1.3 (Relevant Conduct) … and not solely on the basis of elements and acts cited in the count of conviction.” Defendant recruited the couriers to transport marijuana to Florida. She provided the couriers with money to rent a van, and paid them for their participation in the transactions. While there was no independent corroboration for the couriers’ allegations, the district court found their testimony reliable. U.S. v. Ocana, 204 F.3d 585 (5th Cir. 2000).
5th Circuit holds that bank teller was organizer of bank robbery. (431) The district court ruled that defendant, a bank teller, was the organizer/leader of a bank robbery conspiracy, since she “organized everything about the robbery from the attire to be worn by the robbers, when to rob the bank, the denominations to demand, location of the money, what to say to the victim teller, [sic] warn them of tracking devices, [and] how to enter and exit without the security camera recording their faces.” The Fifth Circuit affirmed. This case was distinguishable from U.S. v. Harper, 33 F.3d 1143 (9th Cir. 1994), where the Ninth Circuit rejected a leadership enhancement for a former bank employee who instructed a confederate on how the ATM machine at his former bank operated. Defendant still worked at the bank, was working on the day of the robbery, had placed a call the day of the robbery to tell her confederates when to arrive, and had told them where to go, what to do, what to say, and how to avoid detection. Unlike the defendant in Harper, it was more than defendant’s knowledge of bank procedures that qualified her for the enhancement. Defendant’s integral involvement in planning, mapping out, orchestrating, and directing virtually every aspect of the robbery qualified her for the leader/organizer role. U.S. v. Smith, 203 F.3d 884 (5th Cir. 2000).
5th Circuit holds that defendant was leader of computer chip robbery. (431) Defendant and several other conspirators stole computer chips from a facility in Texas. The Fifth Circuit affirmed a § 3B1.1(a) leadership enhancement based on defendant’s recruitment and planning efforts, his demonstrated control over the other robbers at the crime scene, and his control over the fruits of the crime. Defendant (1) purchased plane tickets for three of the other conspirators who participated in the robbery, and flew with them from California to Texas, where the crime occurred, (2) ordered that the other conspirators at the scene of the crime remain, hidden and waiting for an unsuspecting employee to exit the building; (3) paid other participants in the robbery their share of the profits from the robbery; and (4) recruited five of the conspirators to participate in the robbery. U.S. v. Nguyen, 190 F.3d 656 (5th Cir. 1999).
5th Circuit applies leadership enhancement to part-owner of telemarketing company. (431) Defendant received a § 3B1.1(a) enhancement for his leadership role in a fraudulent telemarketing scheme. The Fifth Circuit found that defendant’s activity clearly fit the role of a leader or organizer. He was part-owner of the business, which entitled him to a larger share of the fruits of the crime. He also exercised a degree of control and authority over the venture. U.S. v. Reissig, 186 F.3d 617 (5th Cir. 1999).
5th Circuit upholds enhancement where defendant signed checks and seemed “more important.” (431) Defendant participated in the theft of an interstate shipment of computers. The PSR recommended a § 3B1.1(a) leadership enhancement based on the following facts: (1) defendant signed the rent checks for the warehouse where the conspirators stored the stolen computers, and (2) a warehouse worker described defendant as seeming more important or talking more than the other men who came to look at the warehouse. Since this evidence supported an inference that defendant possessed some decision-making power, participated extensively in the crime, and exercised control and authority over his co-conspirators, the Fifth Circuit affirmed the enhancement. U.S. v. Lage, 183 F.3d 374 (5th Cir. 1999).
5th Circuit upholds role in the offense enhancement where defendant recruited others to distribute cocaine. (431) Defendant was part of an extensive drug-trafficking conspiracy. She challenged a § 3B1.1(c) enhancement for her role in the offense. At sentencing, the district court cited several instances in which defendant had recruited other people to distribute cocaine for her. The Fifth Circuit found there was sufficient evidence to conclude that defendant occupied a supervisory or management role in the conspiracy. Defendant simply disagreed with the district court as to how her criminal activities should be characterized. U.S. v. Posada-Rios, 158 F.3d 832 (5th Cir. 1998).
5th Circuit upholds managerial enhancement where defendant recruited and directed co-conspirator. (431) Defendant participated in an extensive drug trafficking conspiracy. The Fifth Circuit affirmed a § 3B1.1(c) managerial role enhancement because defendant was responsible for recruiting and directing a co-conspirator in his drug trafficking activities. U.S. v. Posada-Rios, 158 F.3d 832 (5th Cir. 1998).
5th Circuit says more than one person can be leader of drug conspiracy. (431) Defendant argued that he was not the leader of a marijuana conspiracy because a co-conspirator’s testimony established that he sometimes took orders from others. The Fifth Circuit affirmed the § 3B1.1 enhancement because there can be more than one person who qualifies as a leader or organizer or a conspiracy. Defendant recruited accomplices, set prices, controlled individuals, used others as couriers, gave them instructions, participated in and co-authored drug notes, paid travel expenses, and directed a co-conspirator to use coded signals to communicate. U.S. v. Hare, 150 F.3d 419 (5th Cir. 1998).
5th Circuit finds defendant’s phone calls and desire to help sons supported leadership enhancement. (431) Defendant and his sons ran a thriving marijuana business. Defendant claimed he did not deserve a § 3B1.1(c) leadership enhancement because he was at most a supplier for his sons, but did not organize or direct any of their distribution activities. The Fifth Circuit held that the § 3B1.1(c) increase was supported by testimony from the wife of one of defendant’s sons. The wife testified that defendant continuously telephoned her home to inquire about the son’s progress in selling marijuana. She also testified that defendant, when confronted about his involvement in marijuana distribution, claimed he was only trying to “help” his sons by giving them a “good start.” Although this evidence was “rather thin in terms of demonstrating defendant’s control or authority over other individuals,” the court did not clearly err in making those inferences from the testimony. U.S. v. Lowder, 148 F.3d 548 (5th Cir. 1998).
5th Circuit affirms managerial enhancement where witness cooked crack at defendant’s request. (431) Defendant was involved in a conspiracy that distributed cocaine in Mississippi. Defendant worked as a courier for the conspiracy’s leader, often accompanying the leader on this trips to Houston to purchase cocaine, and also dealt cocaine. The Fifth Circuit affirmed a managerial role enhancement based on a co-conspirator’s testimony that he cooked crack for defendant. This was corroborated by another conspirator’s testimony about defendant’s role in the conspiracy. U.S. v. Sylvester, 143 F.3d 923 (5th Cir. 1998).
5th Circuit upholds leadership role for clerk who extorted bribes from social security recipients. (431) Defendant, a clerk for an administrative law judge, accepted bribes to help individuals fraudulently obtain Social Security benefits. Her husband was also involved in the conspiracy. The Fifth Circuit affirmed a leadership enhancement based on her role in altering social security documents to allow the bribers to obtain benefits. U.S. v. Parker, 133 F.3d 322 (5th Cir. 1998).
5th Circuit holds that doctor’s insurance fraud scheme was otherwise extensive. (431) Defendant, a physician, submitted fraudulent claims to insurance carriers for services that either were never performed or were performed by non-physician employees. The Fifth Circuit held that the scheme was “otherwise extensive” under § 3B1.1(a). Defendant created and managed an extensive scheme that generated more than $2 million in fraudulent billings over a 19-month period. He recruited numerous office employees to provide billing and collection support for the fraudulent practices. The far-reaching fraud could not have succeeded without the unwitting participation of defendant’s vulnerable patients and the unknowing assistance of employees in the many insurance companies that received defendant’s fraudulent billings. U.S. v. Sidhu, 130 F.3d 644 (5th Cir. 1997).
5th Circuit applies role increase for supervising preparation of fraudulent tax returns. (431) Defendant, the operator of a wholesale gasoline distributor, purchased gasoline at lower prices by misrepresenting that he was blending the gasoline with ethanol into gasohol. He was convicted of evading federal fuel excise taxes. The Fifth Circuit affirmed a § 3B1.1(c) enhancement based on evidence that defendant supervised his accountant’s work on fraudulent tax returns. U.S. v. Powell, 124 F.3d 655 (5th Cir. 1997).
5th Circuit affirms role increase for founder of large telemarketing company. (431) Defendant founded a company that operated a fraudulent telemarketing promotion across the country. The Fifth Circuit affirmed the application of four level increase under § 3B1.1(a) because defendant founded a company that at one point employed 120 telemarketers to carry out his scheme. U.S. v. Palmer, 122 F.3d 215 (5th Cir. 1997).
5th Circuit upholds 2-level role increase based on police surveillance. (431) Police received a tip that defendant would be manufacturing crack cocaine. They put an apartment under surveillance. Two men leaving the apartment were arrested based on outstanding warrants. After their departures, defendant walked out of the apartment several times, glanced at his watch, and looked around the apartment complex, apparently waiting the return of the two men who had been arrested. He eventually walked across the street to use a pay phone and was arrested on outstanding warrants. The Fifth Circuit affirmed a leadership or managerial role enhancement under § 3B1.1(c) based on evidence that defendant purchased a large amount of cocaine in exchange for $20,000 in cash, his behavior during the officers’ surveillance of the apartment, and his attempt to contact one of the arrested men by beeper after he left the apartment. U.S. v. Thomas, 120 F.3d 564 (5th Cir. 1997).
5th Circuit applies leadership enhancement to two groups of offenses. (431) Defendant was a member of a street gang that conspired to distribute drugs and committed violent crimes in aid of racketeering. Defendant argued that the district court improperly applied a § 3B1.1(a) leadership enhancement to both his drug offenses and his racketeering offenses. The Fifth Circuit upheld the application of the leadership enhancement to both groups of offenses. Unlike the defendant in U.S. v. Kleinebreil, 966 F.2d 945 (5th Cir. 1992), defendant was a leader in both the racketeering conspiracy and the drug conspiracy, two distinct conspiracies to violate distinct criminal laws. U.S. v. Wilson, 116 F.3d 1066 (5th Cir. 1997), vacated in part on other grounds sub nom. U.s. v. Brown, 161 F.3d 256 (5th Cir. 1998) (en banc).
5th Circuit upholds § 3B1.1(c) enhancement despite improper consideration of management of assets. (431) The district court found that defendant was a § 3B1.1(c) organizer of a drug trafficking organization based on his admission that he obtained the money to complete a $180,000 drug transaction. The Fifth Circuit affirmed the enhancement even though the district court improperly considered defendant’s management responsibility over the drug organization’s assets or property rather than people. The § 3B1.1(c) enhancement was not clearly erroneous because defendant also organized other criminal participants. Defendant admitted he recruited money supplies for the drug transactions. Recruitment of accomplices is a proper consideration under § 3B1.1. U.S. v. Giraldo, 111 F.3d 21 (5th Cir. 1997).
5th Circuit upholds § 3B1.1 enhancements for role in telemarketing fraud scheme. (431) Defendants were involved in a scheme in which callers were promised loans once they paid an advance fee of $299. No loans were actually made. The Fifth Circuit upheld § 3B1.1 enhancements for all three defendants. The leader’s contention that he was a foot soldier for others who led the fraud scheme was meritless. The other two defendants deserved § 3B1.1(b) managerial enhancements. These defendants ran their respective offices and played more than a ministerial role in the scheme. One defendant had discretion to refund loans, gave directions to the other telemarketers, and responded to the employees’ suspicions of fraud. The second defendant hired employees for one office, oversaw its daily activities, and was the person to whom employees addressed their concerns about the legitimacy of the operation. U.S. v. Gray, 105 F.3d 956 (5th Cir. 1997).
5th Circuit holds that credit card scheme involved at least five participants. (431) Posing as legitimate business owners, defendants defrauded various banks and credit card companies by processing hundreds of fraudulent charges on stolen credit cards to obtain cash. The Fifth Circuit affirmed § 3B1.1(a) leadership enhancements, confirming that the scheme involved at least five participants. The first defendant was the leader and organizer of five individuals who used the phony businesses to process false charges to stolen credit cards. This defendant leased the premises used for seven of the fraudulent businesses, owned many of the businesses and split the proceeds 50/50 with the possessor of the stolen cards. This defendant also had two others directly under him, and he instructed them to deposit money into different bank accounts to conceal the scheme. Although three people directed by the second defendant were not linked to any precise credit card transactions, they were still “transactional participants.” Recent decisions have broadened the definition of a transaction since U.S. v. Barbontin, 907 F.2d 1494 (5th Cir. 1990). A transaction is not defined not by the contours of the charged offense but by the parameters of the underlying scheme. U.S. v. Ismoila, 100 F.3d 380 (5th Cir. 1996).
5th Circuit upholds managerial role for obtaining transport vehicle and attempting to recruit another. (431) Defendant coerced a truck owner to give him a truck to use for transporting drugs by kidnapping the owner’s son. The owner began cooperating with police. Defendant then directed the owner to locate a load of produce going to Florida. Police stopped the truck carrying watermelons and 773 pounds of marijuana from Texas to Florida. The Fifth Circuit agreed that defendant held a leadership role in the drug conspiracy. Defendant extorted the vehicle from the truck’s owner, attempted to recruit him into the conspiracy, and succeeded in persuading him to locate a load of produce bound for Florida to facilitate the crime. U.S. v. Rivas, 99 F.3d 170 (5th Cir. 1996).
5th Circuit affirms leadership role in alien smuggling scheme. (431) Defendant pled guilty to transporting an alien within the U.S. The Fifth Circuit affirmed a § 3B1.1(c) enhancement because defendant answered the INS’s agent telephone call, identified himself as the person to talk with, arranged to rendezvous with the INS to deliver the alien, drove the truck transporting the alien to the rendezvous point to arrange the alien’s release, and then exited the truck and approached the agent first. Also, defendant was the party identified, along with one other man, as responsible for contacting the friends and relatives of the aliens about their release. Defendant also collected fees from third parties for the release of smuggled aliens. U.S. v. Patino‑Cardenas, 85 F.3d 1133 (5th Cir. 1996).
5th Circuit affirms organizational and leadership roles in marijuana conspiracy. (431) Three marijuana conspirators challenged § 3B1.1 enhancements. The Fifth Circuit affirmed that all three played either leadership or managerial roles in the conspiracy. The first defendant participated in the decision to hire a courier, instructed the courier on when to make trips to Texas, served as the courier’s principal contact upon his return from Texas with marijuana, gave the courier instructions as to what to do with the marijuana, and funded an attempt to purchase 200 pounds of marijuana from a third party in Houston. The second defendant was the leader of the organization in Texas, also storing marijuana in his home and assisting in the loading of marijuana. The third defendant was one of the leaders of the Dallas organization, relaying instructions to the courier, generally assisting the second defendant, and also participating in loading marijuana. U.S. v. Castillo, 77 F.3d 1480 (5th Cir. 1996).
5th Circuit affirms role enhancement based on control over bank accounts. (431) Defendant, the cashier and officer of a bank, was involved in an extensive check kiting scheme. He challenged a § 3B1.1(c) enhancement because he did not manage or supervise any other criminal participants in the scheme. The Fifth Circuit approved the enhancement based on defendant’s control over the bank accounts involved in the scheme in both his capacity as cashier and as head of the wire transfer room. Defendant authorized multiple transfers to a co‑conspirator on uncollected funds, made it possible for the conspirator to receive immediate credit on deposit by using special, endorsed deposit slips, and circumvented the proof machine’s calculation of the float. U.S. v. Jobe, 101 F.3d 1046 (5th Cir. 1996).
5th Circuit approves role enhancement based on decision‑making authority in drug conspiracy. (431) Defendant was convicted of drug and money laundering crimes. He challenged a § 3B1.1(a) enhancement, arguing that he only transported the drugs. The Fifth Circuit approved the enhancement based on defendant’s decision‑making authority in connection with the payment of expenses and assignment of roles for the conspirators. An informant testified to taking directions from defendant and to knowing other participants in the scheme who likewise took orders from defendant. An associate of defendant also deserved a two level leadership adjustment. The associate was present during negotiations regarding the sale of marijuana involved in the first load and was present in Dallas before the arrival of the second load. This defendant used his cellular phone to report that the second load was ready to move and also gave an informant expense money and instructions on transporting the marijuana. U.S. v. Gonzalez, 76 F.3d 1339 (5th Cir. 1996).
5th Circuit says more than one person can qualify as leader or organizer of conspiracy. (431) Defendants argued that they could not have occupied leadership roles in a drug conspiracy because others were above them in the hierarchy. The Fifth Circuit affirmed § 3B1.1(a) enhancements, since more than one person can qualify as a leader or organizer of a conspiracy. The government introduced significant evidence that both defendants exercised extensive control over others in the organization, directing them in the distribution of cocaine, the collection of proceeds, and the kidnapping and intimidation of others. U.S. v. Gaytan, 74 F.3d 545 (5th Cir. 1996).
5th Circuit holds defendant was organizer or leader of drug trafficking organization. (431) Defendant and his wife distributed crack cocaine out of their home. The Fifth Circuit held that defendant was an organizer or leader of a criminal activity involving five or more participants. Two men worked as bodyguards for defendant, and defendant directed the guards’ actions. When the conspirators were arrested, defendant gave the others instructions, and they followed those instructions. Defendant also had control over the sale of drugs by his wife. U.S. v. Buchanan, 70 F.3d 818 (5th Cir. 1995).
5th Circuit agrees that defendant organized girlfriend’s flight from justice. (431) Defendant helped his girlfriend flee from justice and helped her obtain false identification documents. The Fifth Circuit upheld a § 3B1.1(c) enhancement because defendant organized the offenses at issue. He obtained the false documents, rented the villa in which they lived in France, provided the necessary funding, and established a bank account in France. U.S. v. Packer, 70 F.3d 357 (5th Cir. 1995).
5th Circuit approves role enhancement where fraud and money laundering counts were grouped. (431) Defendant was convicted of fraud and money laundering counts. He argued that a § 3B1.1(a) role in the offense enhancement, which would apply to his fraud, should not have been added to his money laundering offense level. The Fifth Circuit affirmed the enhancement since the money laundering and fraud counts were properly grouped. Thus, it was appropriate to apply the fraud-related enhancement to the money laundering base offense level. U.S. v. Leonard, 61 F.3d 1181 (5th Cir. 1995).
5th Circuit agrees that defendant was leader of tax evasion scheme. (431) Defendant and his partner, the owners of a fuel distribution company, conspired to evade federal fuel excise taxes due on the sale of gasoline. Defendant challenged a four-level leadership enhancement, arguing that he relied on the guidance of the others involved, including his partner. The Fifth Circuit upheld the four-level enhancement based on defendant’s ownership of the company. Defendant was directly involved in concealing the transactions between his company and the retailers by using fictitious company names and preparing false invoices. Over 100 retailers were involved in the transactions. The attempted concealment of these transactions required an established organization and a staff of truck drivers instructed by defendant on which type of invoice to use. U.S. v. West, 58 F.3d 133 (5th Cir. 1995).
5th Circuit says CCE acquittal does not foreclose leadership enhancement. (431) Defendant was convicted of drug conspiracy charges. The Fifth Circuit held that the jury’s verdict acquitting him of running a continuing criminal enterprise did not foreclose a leadership enhancement under § 3B1.1(a). The enhancement was proper because five conspirators worked for defendant distributing crack cocaine. U.S. v. McKinney, 53 F.3d 664 (5th Cir. 1995).
5th Circuit holds that PSR supported leadership adjustment. (431) Defendant did not specifically challenge any fact in his PSR or offer any evidence. He argued that there was no factual support for a leadership adjustment under § 3B1.1(a). The Fifth Circuit held that the PSR, which was adopted by the district court, contained sufficient factual findings to support the leadership adjustment. A defendant’s role in criminal activity may be deduced inferentially from the available facts. Here, the PSR stated that a substantial quantity of marijuana was transported to and stored on defendant’s property, with defendant present, and that three unloaders were working “for” defendant. This supported the reasonable inference that defendant was the leader. U.S. v. Ayala, 47 F.3d 688 (5th Cir. 1995).
5th Circuit finds record supported supervisorial role in drug conspiracy. (431) The Fifth Circuit held that defendant’s role as a manager in a cocaine conspiracy was supported by the record as a whole. One conspirator testified that when he transferred cocaine to defendant, defendant gave the orders on the place of transfer and the method of transfer. When the conspirator was late with his payments, defendant led the group that threatened his life. When one of defendant’s associates grabbed the conspirator as if to start a fight, defendant told the associate that the place was not appropriate for such action, and no fight occurred. U.S. v. Morris, 46 F.3d 410 (5th Cir. 1995).
5th Circuit agrees that defendant was leader of conspiracy to steal money and drugs from drug dealers. (431) Defendant, a suspended police officer, was involved in a conspiracy to steal drugs and money from drug dealers. The Fifth Circuit approved a § 3B1.1 leadership enhancement because it was defendant’s idea to steal from drug dealers, and defendant recruited accomplices, made calls to learn the location of some purported drugs, arranged for co-conspirators to come to this location, and directed surveillance. Although the three men planned to split the proceeds equally, the enhancement was not clearly erroneous. U.S. v. Musquiz, 45 F.3d 927 (5th Cir. 1995)..
5th Circuit approves §3B1.1 enhancement for defendant who supervised drug couriers. (431) The district court found that defendant was the organizer or leader of a conspiracy to smuggle heroin into the United States. The Fifth Circuit affirmed the § 3B1.1 enhancement based on evidence that defendant supervised the drug couriers and helped them obtain passports and airline tickets to source countries. U.S. v. Musa, 45 F.3d 922 (5th Cir. 1995).
5th Circuit holds leader need only supervise one culpable person to get four level enhancement. (431) Defendant received a four level enhancement for being an organizer or leader of criminal activity involving five or more participants. Defendant complained that he did not supervise five participants. The Fifth Circuit held that a defendant need only supervise one other culpable participant to be eligible for this enhancement. Defendant supervised at least three other people. U.S. v. Washington, 44 F.3d 1271 (5th Cir. 1995).
5th Circuit affirms organizer enhancement where defendant was more than just a supplier. (431) Defendant contended that his role in supplying large quantities of cocaine to a drug conspiracy was insufficient to support an organizer enhancement under § 3B1.1(a). The Fifth Circuit affirmed the enhancement since it was plausible from the record that defendant was more than just a supplier. The district court concluded that defendant “had a dialogue and connection with his co-conspirators.” U.S. v. Valencia, 44 F.3d 269 (5th Cir. 1995).
5th Circuit agrees that defendant was leader of money laundering conspiracy. (431) Defendant and his son ran a car dealership that sold a number of cars to a drug trafficker. The sales were structured to avoid the necessity of currency transaction reports. The Fifth Circuit agreed that defendant was the leader of criminal activity involving five or more participants. The district court found that defendant was in charge of the operation and that it involved more than five people, including bookkeepers, clerks, and salesmen. U.S. v. Garza, 42 F.3d 251 (5th Cir. 1994).
5th Circuit finds court did not intend to characterize defendant as manager but as organizer. (431) Defendant received a four level enhancement for being the organizer of a drug conspiracy involving five or more participants. He argued that the district court judge characterized him as a manager, and thus he should only have received a three level enhancement. The 5th Circuit upheld the enhancement, finding that the judge did not intend to characterize defendant as a manager for purposes of sentencing. The judge used this title as nomenclature to better describe the overall activities of defendant. U.S. v. Narvaez, 38 F.3d 162 (5th Cir. 1994).
5th Circuit says defendant need not personally lead or organize five or more participants. (431) Defendant received a four level enhancement under §3B1.1(a) for being the leader or organizer of a criminal activity that involved five or more participants or was otherwise extensive. The 5th Circuit upheld the enhancement, even though the government did not show that defendant personally led or organized five or more participants. The court noted the conflict among the circuits over whether a defendant must actually lead or organize five participants. It was persuaded by the November 1993 amendment to the commentary to §3B1.1, which states that to qualify for the enhancement, the defendant must have been the organizer or leader of one or more other participants. Although this commentary was not in effect at the time that defendant was sentenced, the guideline was in effect, and the comment merely provided additional instruction in the guideline’s proper interpretation. U.S. v. Okoli, 20 F.3d 615 (5th Cir. 1994).
5th Circuit affirms managerial role for recruiting co-conspirators and transporting cocaine. (431) The 5th Circuit held that a three-level managerial enhancement was not plain error. Defendant made trips to Houston to pick up multiple kilograms of cocaine which he transported to central Texas for distribution in other cities. He recruited individuals to distribute drugs; and he claimed a larger share of the profits. U.S. v. Mitchell, 31 F.3d 271 (5th Cir. 1994).
5th Circuit upholds leadership enhancement despite acquittal of CCE charges. (431) Defendant was convicted of various drug charges, but acquitted of running a continuing criminal enterprise. She argued that an organizer enhancement was improper, given her acquittal of the CCE charges. The 5th Circuit found that there was ample support for the enhancement. Along with her two sisters, defendant was a founding member of this conspiracy. After a co-conspirator was arrested, defendant and her sisters took over his position as overseer of distribution. There was also evidence that defendant recruited participants, directed the actions of drivers and other participants, and accepted some of the payments for the drug transactions. U.S. v. Puig-Infante, 19 F.3d 929 (5th Cir. 1994).
5th Circuit finds five criminally responsible participants despite acquittal of two of them. (431) Defendant received an enhancement under § 3B1.1(a) for being the leader of criminal activity involving five or more participants. The 5th Circuit upheld the enhancement, even though two of the participants were acquitted. The two acquitted played a meaningful role in the conspiracy, and defendant did not contest that he led them. One man was present when the kidnap victim was beaten and stuffed in the trunk. The two also drove to the hotel where the conspirators were staying, and accompanied them to the field to dispose of the victim. The government proved the presence of five criminally responsible participants. U.S. v. Davis, 19 F.3d 166 (5th Cir. 1994).
5th Circuit holds that defendant was leader of bank fraud scheme. (431) The 5th Circuit upheld a four level enhancement based on defendant’s leadership role in a bank fraud scheme. The scheme involved at least five participants: defendant, three co-defendants, and one of defendant’s employees who prepared fraudulent letters of credit and counterfeit certificates of deposit. In addition, defendant organized and managed almost every aspect of the operation. U.S. v. Wilder, 15 F.3d 1292 (5th Cir. 1994).
5th Circuit holds that employees who knowingly participated in fraud were participants. (431) Defendant was convicted of various fraud counts in connection with his operation of a development center funded by the U.S. Department of Commerce. The 5th Circuit upheld a four level enhancement under section 3B1.1(a), finding the criminal activity involved five or more participants. In addition to defendant, at least four other employees participated in the fraudulent activities leading to defendant’s conviction. Contrary to defendant’s assertions, these individuals need not have been charged or convicted with him in order to be counted as participants in the criminal activity; they only need have participated knowingly in some part of the criminal enterprise. U.S. v. Boutte, 13 F.3d 855 (5th Cir. 1994).
5th Circuit agrees that drug conspiracy involved five participants. (431) The 5th Circuit affirmed a four level role in the offense enhancement under section 3B1.1(a), agreeing that the conspiracy involved five participants. Defendant himself counted as a participant. Two witnesses admitted that they were participants in the conspiracy. One witness also testified that another woman, the owner of a diner, safeguarded drug proceeds for defendant. She could be considered a participant because her actions directly brought about the specific charged offense. Finally, a co-defendant could be counted as the fifth participant. The court agreed with the district court’s conclusion that defendant orchestrated every aspect of the conspiracy, and thus earned the enhancement. U.S. v. Gadison, 8 F.3d 186 (5th Cir. 1993).
5th Circuit affirms leadership role where seized cocaine was part of larger shipment. (431) The 5th Circuit upheld defendant’s leadership role in a cocaine distribution conspiracy. The district court was entitled to rely on information that defendant’s involvement with the 220 kilograms of seized cocaine was merely part of a larger scheme to distribute 750 kilograms of cocaine shipped from Colombia to Mexico. Defendant did not question either the DEA agent who testified about this or the probation officer, nor did he otherwise contend that the results of the DEA investigation were inaccurate. U.S. v. Montoya-Ortiz, 7 F.3d 1171 (5th Cir. 1993).
5th Circuit affirms that defendant functioned as manager or supervisor for his father in cocaine smuggling scheme. (431) Defendant argued that the role in the offense enhancement under §3B1.1(b) was arbitrarily based on his being the son of the organizer of the conspiracy. The 5th Circuit upheld the enhancement, in light of evidence that defendant attended a meeting with a Colombian national responsible for transporting large shipments of cocaine, participated in a scheme to transport 150 kilograms of cocaine from Guatemala to Houston, recruited another individual to drive a truck in which cocaine was concealed, and traveled to Mexico to pay a bribe. U.S. v. Palomo, 998 F.2d 253 (5th Cir. 1993).
5th Circuit upholds leadership enhancement where cocaine was exact amount promised agents. (431) Defendant alleged that his co-conspirator lied to the probation officer when stating that defendant was his cocaine source, and that this lie was used to impose a leadership enhancement under section 3B1.1. The 5th Circuit found there was sufficient evidence supporting the co-conspirator’s statement and the enhancement. Eight ounces of cocaine were seized from defendant’s car–the exact amount that the co-conspirator had told agents he would retrieve from his source. Moreover, the location of defendant and his car were consistent with the co-conspirator’s representations as to the location of his source. Moreover, a bag in defendant’s car contained records written in defendant’s handwriting detailing substantial drug transactions. U.S. v. Santiago, 993 F.2d 504 (5th Cir. 1993).
5th Circuit affirms manager adjustment. (431) In defendant’s drug conspiracy, defendant negotiated prices, recruited new members, and directed the action of others in furtherance of the conspiracy. Accordingly, the 5th Circuit was not left “with the definite and firm conviction that a mistake has been committed” in enhancing defendants offense level for her managerial role. U.S. v. Pofahl, 990 F.2d 1456 (5th Cir. 1993).
5th Circuit upholds consideration of role in underlying scheme to determine role in the offense. (431) In applying a managerial enhancement under section 3B1.1(b), the district court looked beyond the offense of conviction, which was limited to a conspiracy to manufacture methamphetamine from March 18 to 21, and relied on evidence establishing that defendants were chief participants in a larger multi-state conspiracy to manufacture and distribute methamphetamine-amine. The 5th Circuit held that it was proper to look at defendants’ role in the underlying scheme to determine their role in the offense. An amendment to the guidelines effective November 1, 1990, and 5th Circuit precedent make it clear it is not the offense charged that defines the outer limits of the transaction, but the contours of the underlying scheme itself. U.S. v. Eastland, 989 F.2d 760 (5th Cir. 1993).
5th Circuit affirms leadership role of defendant who carried out principal steps of bank robbery. (431) The 5th Circuit affirmed that defendant was an organizer or leader of two bank robberies. An FBI investigation determined, through statements made by a co-defendant and some of his friends, that the co-defendant was influenced by defendant and followed defendant around. In addition, it was defendant, not the co-defendant, who went into both banks by himself and carried out the principal steps of the robbery. The co-defendant only drove the getaway car in the last robbery. U.S. v. Lee, 989 F.2d 180 (5th Cir. 1993).
5th Circuit affirms leadership role of defendant who could approve or disapprove transaction negotiated by another. (431) The 5th Circuit affirmed that defendant was an organizer or leader of a drug conspiracy under section 3B1.1(a), in light of testimony that defendant had supplied the cocaine for several deals, was in a position to approve or disapprove a transaction negotiated by his co-defendant, and had directed the execution of a cocaine sale to an undercover agent. U.S. v. Watson, 988 F.2d 544 (5th Cir. 1993).
5th Circuit finds that fraud scheme involving 2000 investors and $11 million was extensive. (431) The 5th Circuit affirmed that defendants’ fraud scheme was extensive under section 3B1.1, since it involved 2000 defrauded investors and eleven million dollars. U.S. v. Stouffer, 986 F.2d 916 (5th Cir. 1993).
5th Circuit affirms that defendant held supervisory role in telemarketing scam. (431) The 5th Circuit affirmed that defendant held a managerial or supervisory role in a telemarketing scam. Defendant brought in other conspirators, including those who mailed postcards to potential victims and factors who helped the organization launder funds. He advised other conspirators on how and where to mail the postcards, personally introduced and modified the design of the cards, and had them mailed throughout the country. He advised the conspirators about which states to avoid mailing to in order to escape heightened scrutiny. He advised about the need for factors and helped arrange their introduction and use. He was instrumental in creating, designing and carrying out the telemarketing mailing for the conspiracy. U.S. v. Tansley, 986 F.2d 880 (5th Cir. 1993).
5th Circuit says unsworn assertion that there was no leader did not constitute objection. (431) The 5th Circuit affirmed a leadership enhancement based upon defendant’s role in an odometer-tampering scheme. First, he objected to the enhancement only at the sentencing hearing, based solely upon his attorney’s assertion that there was no leader and that everyone voluntarily participated in the scheme. The court would not consider objections in the form of unsworn assertions. Moreover, the record supported the enhancement. Defendant’s contention that the court should have limited itself to consideration of the falsification of car titles charges was unavailing. All of defendant’s conduct was part of one odometer-tampering scheme. Defendant directed the activities of at least nine other individuals, including buyers, “spinners,” and secretaries. U.S. v. Whitlow, 979 F.2d 1008 (5th Cir. 1992).
5th Circuit upholds organizer enhancement for defendant who used chain of command. (431) The 5th Circuit upheld a two level increase for defendant’s role as an organizer or leader. The district court adopted the findings of the presentence report, which stated that defendant was the organizer of a conspiracy to distribute cocaine, and used a chain of command in his distribution scheme, with one conspirator as a middleman and another as a cocaine distributor. U.S. v. Singer, 970 F.2d 1414 (5th Cir. 1992).
5th Circuit affirms that defendants were managers of conspiracy to export helicopters. (431) The 5th Circuit affirmed that defendants held a leadership or managerial role in a conspiracy to illegally export out of the United States seven Model 204 helicopters. The scheme was more far-reaching than a two-man conspiracy. Defendants recruited an informant’s involvement and met with an undercover Customs agent. At least one other person attended a meeting as well. One defendant represented himself as a broker in the transaction, and the other identified himself as the representative of an unnamed foreign buyer. U.S. v. Peters, 978 F.2d 166 (5th Cir. 1992).
5th Circuit upholds organizer enhancement based on co-conspirators’ inadmissible confessions. (431) Six people arrested by border patrol agents confessed that they had been hired by defendants to transport marijuana across the border. Although these confessions were inadmissible at trial, they were used at defendants’ sentencing to impose a leadership enhancement under section 3B1.1(c). The 5th Circuit affirmed the reliance upon the inadmissible confessions. Evidence that is inadmissible at trial may be considered in a sentencing hearing. The confessions had sufficient indicia of reliability, since they corroborated each other. Additionally, defendants rested separately from the other group of co-conspirators in the holding cell, dressed differently from the other group, and responded differently to police questioning. U.S. v. Rojas-Martinez, 968 F.2d 415 (5th Cir. 1992).
5th Circuit finds that leadership enhancement was based on reliable information. (431) The 5th Circuit rejected defendant’s claim that the information in the PSR about his leadership role was based on unsubstantiated claims. The information was based on statements from confidential informants and cooperating defendants. The court also rejected defendant’s claim that the enhancement was improper since his “leadership conduct” occurred before the time frame of the conspiracy. A defendant’s role in the offense is determined on the basis of all relevant conduct, and not solely on the basis of elements and acts cited in the count of conviction. The district court heard testimony specifically identifying defendant’s role as a leader and supervisor in the overall cocaine conspiracy. U.S. v. Vaquero, 997 F.2d 78 (5th Cir. 1993).
5th Circuit upholds older brother’s leadership role. (431) Defendant contended that his two-point enhancement under guideline section 3B1.1(c) for being a leader of a criminal activity was improper because his role was no different from the other two participants. Any dominance he had over them, defendant contended, resulted from his relationship to them (boyfriend to one, older brother to the other), rather than his role in the criminal activity. The 5th Circuit found the evidence sufficient to uphold the enhancement. A police officer testified that an informant had advised authorities that defendant was in charge of the other two. Further, defendant’s girlfriend informed an undercover agent that she took care of defendant’s drug business for him. At defendant’s meeting with the undercover agent to purchase drugs, defendant negotiated with the undercover agent, instructed his younger brother to test the drugs, give the agent the money and to take the drugs outside and wait for him. U.S. v. Kinder, 946 F.2d 362 (5th Cir. 1991).
5th Circuit upholds reliance on co-conspirator’s hearsay statements to find defendant was an organizer. (431) The district court found that defendant was an organizer under guideline section 3B1.1 based upon statements in the presentence report which a co-conspirator had made to DEA agents. The statements revealed that defendant recruited the co-conspirators, directed the co-conspirators to pick up the drugs at a specific place, and paid the co-conspirator $25,000 in cash. The co-conspirator did not testify at defendant’s trial or at his sentencing hearing. The 5th Circuit upheld the enhancement, ruling that the information was not unreliable or materially untrue. Defendant submitted no evidence to rebut the information in the presentence report. His objection to the presentence report consisted only of the unsworn assertion by his attorney. Unsworn assertions do not bear sufficient indicia of reliability to be considered by the trial court in making its factual findings. In addition, the co-conspirator’s statements were consistent with facts that the DEA already knew to be true. U.S. v. Chavez, 947 F.2d 742 (5th Cir. 1991).
5th Circuit affirms that defendant was manager of “green” card conspiracy. (431) The 5th Circuit affirmed that defendant was a manager of a conspiracy to obtain and sell illegal immigration “green” cards. The success of the conspiracy was based on customers willing to engage in an illicit transaction. Defendant had the credentials, the contacts and the reputation to find accomplices. He produced seven customers, administered the application process, provided a sense of safety and solace to his fellow conspirators, and stood to gain a green card for himself at little cost. U.S. v. Liu, 960 F.2d 449 (5th Cir. 1992).
5th Circuit upholds leadership enhancement for defendant who supplied marijuana and was involved with buyers. (431) Defendant was involved in a conspiracy which transported marijuana from Texas to Atlanta, Georgia. The 5th Circuit upheld a two-level leadership enhancement under guideline section 3B1.1(c). The evidence established that (a) defendant supplied the marijuana for the trips to Atlanta, (b) defendant was involved with the men who picked up the marijuana and paid for the load, (c) defendant chose the hotel where they met, (d) defendant directed one of the couriers to count the money from the buyers and gave the courier permission to keep the small bills, and (e) when another courier was stopped with money in the Atlanta airport, it was defendant and another co-conspirator who met with the courier to discover what happened to the money. U.S. v. Hinojosa, 958 F.2d 624 (5th Cir. 1992).
5th Circuit affirms that money laundering scheme was extensive. (431) Defendant received an enhancement under guideline § 3B1.1(a) for being the organizer or leader of a criminal activity that involved five more participants or was otherwise extensive. The 5th Circuit affirmed the district court’s determination that defendant’s money laundering operation was “otherwise extensive.” The scheme took defendant to at least two foreign countries, and spanned almost three years. By the time of his arrest, defendant had laundered over one million dollars and had expressed a willingness and capability to handle even larger sums. Defendant used the unknowing services of many outsiders such as bank employees, which is relevant under application note 2 to § 3B1.1. U.S. v. Allibhai, 939 F.2d 244 (5th Cir. 1991).
5th Circuit affirms supervisory role for defendant who stored drug proceeds and distributed crack. (431) The 5th Circuit rejected defendant’s challenge to a three-point adjustment for his supervisory role in a drug conspiracy. Defendant was more than just another drug runner; he was involved in both procuring and distributing drugs. Defendant’s arrangement of a place to store the proceeds and undistributed crack not only included renting apartments, but actually purchasing and using an apartment complex to house a crack joint. This was sufficient involvement, even ignoring defendant’s other activities, to support the inference that he exercised control over others. U.S. v. Thomas, 932 F.2d 1085 (5th Cir. 1991).
5th Circuit finds that defendant who was known as the “big man” was manager or supervisor of drug conspiracy. (431) Evidence at trial established that defendant was known as the “big man,” was treated with deference by his co-conspirators, made unilateral decisions material to the furtherance of the conspiracy, was the first person notified upon delivery of cocaine and contemplated the future plans of the conspiracy. The 5th Circuit found that this supported the district court’s determination that defendant was a manager or supervisor of the drug conspiracy. U.S. v. Zapata-Alvarez, 911 F.2d 1025 (5th Cir. 1990).
5th Circuit upholds finding of more than one leader in arson case. (431) The 5th Circuit upheld the district court’s finding that defendant who recruited codefendants who started the fire, led the codefendants to the building for a preliminary inspection, and provided the codefendants with a key for their entry into the building on the evening of fire, was an organizer of the arson of building. Defendant contended that since one of his codefendant’s also was found to be an organizer, it was improper to also enhance his sentence on this basis. The 5th Circuit rejected this argument, finding that more than one person can qualify as a leader or organizer of a criminal offense. U.S. v. Paden, 908 F.2d 1229 (5th Cir. 1990).
5th Circuit upholds determination that four other participants were involved in offense. (431) Defendant did not deny that he managed or supervised a drug sale to an undercover agent, but denied that there were four other people involved in the sale. The 5th Circuit rejected this argument. The presentence report indicated that the undercover agent was taken by defendant to the rear of defendant’s bail bonds business where the agent observed four people cutting or testing heroin. Defendant contended that two of these individuals were merely employees of his bail bonds business who did not participate in the sale. This assertion merely created a credibility question for the trial judge, who chose to accept the facts in the presentence report. U.S. v. Alfaro, 919 F.2d 962 (5th Cir. 1990).
5th Circuit upholds leadership enhancement based on defendant’s role in related transaction. (431) Defendant agreed to purchase a large amount of marijuana from the agent in exchange for cash and cocaine. This transaction was aborted after defendant’s associates recognized a confidential informant. Defendant pled guilty to possession of cocaine. He received a two-level increase in offense level based upon his leadership role in a criminal activity that involved more than five participants. He contended that the district court improperly based its findings on participants involved in the aborted marijuana transaction, rather than in the cocaine transaction to which he pled guilty. The 5th Circuit found that it was proper for the district court to consider defendant’s role in the marijuana transaction. The proposed exchange of the cocaine and the marijuana were “interdependent.” The money generated from the purchase of the marijuana would be used to bankroll the sale of cocaine. U.S. v. Villarreal, 920 F.2d 1218 (5th Cir. 1991).
5th Circuit affirms finding that defendant was an “organizer or leader” of a criminal enterprise. (431) Defendant received a 4-point increase in base offense level for being an “organizer or leader” of a criminal activity involving five or more people. At the plea hearing, defendant admitted the accuracy of the prosecutor’s description that defendant was a “principal” in the organization. Defendant also agreed that the court was correct in stating that defendant was the “New York end” of the cocaine organization. Finally, secretly taped conversation indicated defendant’s approval was needed in all transactions. Based on these facts, the 5th Circuit held the District Court was not clearly erroneous in finding defendant to be an “organizer or leader.” U.S. v. Rodriguez, 897 F.2d 1324 (5th Cir. 1990).
5th Circuit holds that defendant’s appropriation of drug money showed he was a “manager.” (431) Defendant brought a kilo of cocaine from Texas to Florida and received a $23,000 payment for the drugs from an undercover agent and a co-defendant. When defendant was arrested a short time later, half of the money was missing. The 5th Circuit held that because defendant had dealt with the proceeds this indicated that he was “entitled to dispose of the funds and not merely a courier.” Thus, the finding that defendant was a “leader, manager or supervisor” of a drug conspiracy was not clearly erroneous. U.S. v. Alvarado, 898 F.2d 987 (5th Cir. 1990).
5th Circuit finds that counting money in a drug conspiracy shows “organizer” role. (431) Defendant claimed the district court erred in finding him to be an “organizer” of a conspiracy to purchase marijuana. Defendant was in charge of $200,000 in cash when others left to examine the marijuana, was found counting the money, purchased a truck in his own name to be used in the conspiracy and also traveled to New York to further the conspiracy. The 5th Circuit held that these facts supported the district court’s finding that defendant was an organizer of the conspiracy. U.S. v. Farrell, 893 F.2d 690 (5th Cir. 1990).
5th Circuit finds sufficient evidence to support finding that defendant was a manager of criminal activity that was “otherwise extensive.” (431) The base offense level for defendant was increased three points after the district court found him to be the manager of a criminal activity that was “otherwise extensive.” (U.S.S.G. 3B1.1(b)) Defendant was involved in a drug conspiracy shipping cocaine halfway across the country for distribution. The conspiracy involved at least two suppliers from California shipping drugs to Texas. Additional persons other than those arrested were involved in the conspiracy. Based on these facts, the 5th Circuit ruled the district court’s findings were not clearly erroneous. U.S. v. Pierce, 893 F.2d 669 (5th Cir. 1990).
5th Circuit rules alien smuggler was organizer of activity involving 5 or more persons. (431) The district court identified 4 participants in the alien smuggling organization, and the government said that the fifth participant was “the boat man who floated the aliens across the Rio Grande.” The district court described the defendant as a “full-blown coyote,” the “central figure” who operated in a particularly mercenary fashion, and who handled all the money. The Fifth Circuit held that the district court’s factual findings that the defendant was an “organizer” as defined in § 3B1.1 was not clearly erroneous. U.S. v. Velasquez-Mercado, 872 F.2d 632 (5th Cir. 1989).
5th Circuit rules finding that defendant was organizer, leader, or manager was not clearly erroneous. (431 The 5th Circuit held that the evidence was sufficient to justify a two point increase in the defendant’s base offense level under § 3B1.1(c). The defendant had recruited and directed a codefendant, was the main participant in negotiations with an undercover officer, and used his apartment as a base of operations. Because these facts were not clearly erroneous, an increase was justified. U.S. v. Vasquez, 874 F.2d 250 (5th Cir. 1989).
5th Circuit upholds ruling that defendant was “organizer” of methamphetamine conspiracy. (431 Defendant appealed her sentence, claiming that the district court erroneously increased her offense level by two points under § 3B1.1 after it had found her to be an “organizer or leader.” The court found that defendant’s role was that of a supervisor in setting up the methamphetamine lab and lab equipment. She was responsible for and played a major role in measuring the chemicals and supervising the manufacturing process. The 5th Circuit affirmed the sentence, stating that this factual determination was not clearly erroneous. Because the district court correctly applied the guidelines to facts which were not “clearly erroneous”, the sentence was appropriate. U.S. v. Davis, 868 F.2d 1390 (5th Cir. 1989).
5th Circuit upholds finding that defendant was an organizer or leader. (431 Defendant argued that the trial court erred in increasing his guideline offense level because he was an “organizer or leader.” The 5th Circuit upheld the adjustment, noting that defendant acted independently in deciding whether to sell and the amount and timing of the sale. He also did not require advance payment for up to one-half pound of cocaine and indicated he had more than one source. U.S. v. Barreto, 871 F.2d 511 (5th Cir. 1989)
5th Circuit holds defendant’s role as manager justified a two point increase in offense level. (431) The defendant pled guilty to one count of illegally smuggling two aliens into the U.S. The district court sentenced him to ten months in prison, finding that his role was that of an “organizer, leader or supervisor.” This was an aggravating factor which justified a two point increase in his offense level (§ 3B1.1). The 5th Circuit affirmed, holding that because this determination is essentially factual, it is reviewed under the clearly erroneous standard. The finding was not clearly erroneous. U.S. v. Mejia-Orosco, 867 F.2d 216, amended, 868 F.2d 807 (5th Cir. 1989).
6th Circuit agrees that operator of pain clinic held leadership role in drug conspiracy. (431) Defendant and her husband were convicted of various crimes associated with their operation of several pain-management clinics. The Sixth Circuit found sufficient evidence to support the district court’s finding that defendant was a leader. The conspiracy involved at least five participants. Everyone involved in the conspiracy considered defendant the pain clinics’ “boss.” And she acted the part by opening the clinics, managing day-to-day operations, hiring employees, encouraging employees to see more and more patients, requiring employees to produce fake medical files for phantom patients, ordering pills she had no business ordering, and splitting profits from street sales of the pills. Such acts of decision-making, recruitment and profit-taking are the hallmarks of an “organizer or leader,” under Note 4 to § 3B1.1. Although other conspirators, including her husband, may have been the ringleaders, more than one person can qualify as a leader or organizer. U.S. v. Sadler, 750 F.3d 585 (6th Cir. 2014).
6th Circuit holds that defendant held leadership role in bombing conspiracy. (431) Defendant was one of four defendants who placed explosives at the base of a bridge in Ohio, and attempted to detonate them. The district court applied a § 3B1.1(c) enhancement, finding that defendant served as the group’s leader by enlisting the other defendants in the scheme, making contact with the confidential informant, proposing that the group use explosives, and selecting the bridge as the group’s target. The Sixth Circuit upheld the increase. A co-defendant testified under oath that defendant had introduced him to the informant, spoke with him about obtaining explosives, and told him about the plan to place the explosives beneath the bridge. Defendant encouraged the group to come to a “consensus” on their plan, which consisted, at the time, of targeting a cargo ship by placing C-4 underwater and detonating it as a ship approached. Although defendant’s plan was not carried out, this evidence supported the district court’s interpretation that defendant acted as coordinator and sought the participation and agreement of the others. Additionally, an undercover FBI agent testified that defendant suggested that the group meet “every couple of days,” and directed other defendants to set up secure email accounts and to access online forums to facilitate planning. U.S. v. Wright, 747 F.3d 399 (6th Cir. 2014).
6th Circuit finds defendant held leadership role in fraud scheme. (431) Defendant was convicted of money laundering and conspiracy to commit program fraud arising out of her role in a business venture that provided wellness services to the Detroit Public School (DPS) system. In fact, the program was a fraud, and submitted fraudulent invoices for services never provided. The Sixth Circuit upheld a four-level enhancement for her organizer or leadership role in the fraud. The heart of the fraud was an arrangement in which defendant suggested, agreed to, and organized surreptitious cash payments to a DPS insider who exerted his influence to get invoices paid. These invoices were inflated at defendant’s suggestion. While defendant may or may not have been a leader in the business, it was not unreasonable for the court to conclude that she was a leader or organizer of the conspiracy. U.S. v. Washington, 715 F.3d 975 (6th Cir. 2013).
6th Circuit affirms managerial enhancement for recruiting accomplices. (431) Defendant was convicted of conspiracy to produce and traffic in fraudulent identification documents. He challenged a § 3B1.1 managerial role enhancement, arguing that at most, the evidence showed that he was present for six weeks of the conspiracy, made 10 documents, handed out business cards, and sold a couple of documents. He argued there was no evidence he managed employees, directed sales, supervised salesmen, took money, or even had authority over who was allowed into the apartment. The Sixth Circuit upheld the enhancement, finding that defendant recruited three individuals from Kansas and brought them to the facility. Thus, the enhancement was proper even though defendant’s creation of documents, moving the operations between apartments, living in the apartment, and having access or control over the implementations did not warrant the enhancement, and even though the district court clearly erred in finding that defendant sent two co-conspirators into the street to solicit customers. U.S. v. Castilla-Lugo, 699 F.3d 454 (6th Cir. 2012).
6th Circuit holds that defendant held leadership role in mortgage fraud scheme. (431) Defendant, the owner of a mortgage company, engaged in a fraud scheme with seven “straw buyers” to purchase homes based on loan applications that misrepresented their financial situation. The Sixth Circuit upheld a § 3B1.1(a) leadership increase. Defendant laid the foundation for, and provided much of the infrastructure for, the conspiracy. He recruited seven buyers, enlisted builders and others to sell them 22 homes, and brought the operators of a mortgage capital corporation into the fraud. At each stage, he gave his confederates precise directions, all to the end of sustaining the ongoing enterprise. Without defendant’s expertise, connections and command, the conspiracy would never have gotten off the ground. Defendant met the requirements of an “organizer or leader” of the conspiracy. U.S. v. Stafford, 639 F.3d 270 (6th Cir. 2011).
6th Circuit relies on unobjected-to facts in PSR to support leadership increase. (431) Defendant pled guilty to conspiracy to distribute cocaine hydrochloride, and received a four-level increase for having a leadership role in the offense. The Sixth Circuit affirmed. The indictment charged at least 12 individuals with involvement in the drug conspiracy, and at least six of those co-defendants, including defendant, pled guilty to the charges. As for defendant’s leadership role, to qualify for the adjustment, defendant need only have been the organizer or leader of one or more other participants. The PSR indicated that defendant acted as the supplier for the drug trafficking organization. It also detailed conversations between defendant and other individuals, which indicated that defendant and Bates were the organizers and leaders of the organization. Defendant did not object to the PSR’s factual allegations, and thus the district court was entitled to accept them as true. U.S. v. Baker, 559 F.3d 443 (6th Cir. 2009).
6th Circuit holds that jail administrator was leader of civil rights conspiracy. (431) Defendant, a jail administrative officer, was convicted of civil rights violations related to an assault against a prisoner at the county jail. Prison inmates had assaulted the victim at the request of officers at the jail. Defendant challenged a §3B1.1(a) leadership increase, arguing that the court applied the enhancement primarily because he was the leader of the jail, not a leader of the specific criminal activity of which he was convicted. The Sixth Circuit found no error. Defendant had ordered his lieutenant to speak with two inmates about assaulting the prisoner, who would be moved to the inmate’s pod later in the day. The instructions were detailed to include parameters about the amount of force to be used against the prisoner. A shift-leader testified that defendant ordered the prisoner’s move from the holding cell to the pod. Following the assault, defendant met with the inmates and suggested how they might develop a story to hide the fact that defendant had ordered the assault. When the inmates delayed writing their formal statement, defendant sent an officer to speak with the inmates to press them to submit the false statement. U.S. v. Gilpatrick, 548 F.3d 479 (6th Cir. 2008).
6th Circuit applies leadership increase where defendant negotiated details of drug sale. (431) Defendant pled guilty to a number of drug and firearms charges related to a drug transaction that turned into an armed robbery. Defendant challenged a § 3B1.1(a) leadership increase, arguing that his accomplice was the leader. However, more than one person can hold a leadership role in a conspiracy. The Sixth Circuit affirmed the enhancement, because defendant negotiated the details of the drug sale, had the money, and checked the cocaine for quality. U.S. v. Thompson, 515 F.3d 556 (6th Cir. 2008).
6th Circuit approves leadership enhancement for role in fraud scheme. (431) Defendant engaged in a scheme to fraudulently obtain over $1.6 million from various individuals and corporations. He and his associates obtained money from victims by falsely representing that they worked as either attorneys or financial advisors who would invest the victims’ money; they converted the money for their own personal use. The Sixth Circuit affirmed a § 3B1.1(c) leadership increase. The district court properly applied the factors for determining management of a criminal organization. In particular, the court focused on the fact that defendant had exercised authority and control over others and had received a larger share of the profits from the scheme. The combination of these factors was sufficient to show that defendant was a manager, leader, or organizer of the scheme. The factual record supported the court’s conclusions. U.S. v. Lalonde, 509 F.3d 750 (6th Cir. 2007).
6th Circuit affirms supervisory increase where co-defendant delivered crack 20 times for defendant. (431) The district court applied a § 3B1.1(c) increase for defendant’s supervision of Ward. The court found that where Winton ordered crack from defendant on twenty separate occasions over the course of many years, and the crack was delivered by Ward. “[i]t is implausible that [defendant] was not exercising some degree of control over Mr. Ward, or the relationship would not have continued as long as it did and on the number of occasions it did.” The Sixth Circuit found no clear error. U.S. v. Ward, 506 F.3d 468 (6th Cir. 2007).
6th Circuit agrees that defendant held leadership role in drug conspiracy. (431) The facts found by the district court supported the conclusion that defendant was an organizer or leader of a drug distribution conspiracy. For example, in a conversation with co-conspirator Laurel, defendant “looked Laurel in the eye and said, you know what you have to do.” The district court found this was “a pretty powerful indicat[or] of a supervisory relationship. [Defendant] was giving orders.” In addition, the fact that defendant was supplying Laurel with drugs demonstrated a significant degree of planning, organizing, and participation on the part of defendant. The Sixth Circuit held that the district court properly held that defendant was an organizer or leader under § 3B1.1. U.S. v. Moncivais, 492 F.3d 652 (6th Cir. 2007).
6th Circuit holds that defendant who recruited others to cash counterfeit checks held leadership role. (431) Defendant was involved in a counterfeit check cashing scheme involving up to seven people. Defendant would steal outgoing mail from mailboxes in order to obtain bank routing and account numbers from checks. That information was used to produce the counterfeit checks. The Sixth Circuit affirmed a § 3B1.1(b) leadership increase. Defendant admitted to recruited other individuals to act as check-cashers. He proposed the scheme to the recruits, drove them to the bank, and shared in the proceeds. There was no question that there were more than five participants in the scheme. U.S. v. Gates, 461 F.3d 703 (6th Cir. 2006).
6th Circuit holds that defendant held supervisory role in vote-buying scheme. (431) Defendant was convicted of violating the federal vote-buying statute, 42 U.S.C. § 1973i(c) after paying three people to vote for a candidate for local office. He challenged a § 3B1.1(c) supervisory-role enhancement arguing that the supervision he exercised was no more than necessary to establish a vote-buying offense. The Sixth Circuit disagreed, because the mere act of paying for a vote violates § 1973i(c) regardless of the degree of supervision the vote buyer provides. Defendant did more than merely pay for votes – he also transported voters to the polls and, in the case of one vote seller, voted that person’s ballot. The enhancement was proper. U.S. v. Madden, 403 F.3d 347 (6th Cir. 2005).
6th Circuit upholds increase for role in stolen check scheme. (431) Defendant argued that the district court erred in imposing a two-point enhancement for his leadership role in a stolen check scheme. The Sixth Circuit held that the enhancement was not improper. Although Hardy was the central organizer and leader in the scheme, defendant still had an organizing hand in the scheme. Defendant taught Hardy the mechanics of the check fraud scheme (including how to steal the checks, wash them in acetone, and alter their payees and amounts) and defendant suggested that he and Hardy use third parties to cash the fraudulent checks. U.S. v. McDaniel, 398 F.3d 540 (6th Cir. 2005).
6th Circuit finds sufficient evidence that defendant used enforcers to assault drug debtors. (431) The district court found that five or more participants were involved in the criminal activity and that defendant “was at the center of the conspiracy.” Moreover, he managed the distribution of the drugs and managed other people. The Sixth Circuit affirmed, rejecting defendant’s claim that he used enforcers to intimidate or assault other individuals. Co-conspirator Sanders testified that defendant and Walker assaulted someone over a drug debt. The co-conspirator also testified that he had assisted defendant in assaulting another person over a drug debt. There also was evidence that defendant was assisted by two other men when he assaulted a third man in a restroom. This evidence was sufficient to support the court’s conclusion that defendant was a manager or supervisor under § 3B1.1(b). U.S. v. Henley, 360 F.3d 509 (6th Cir. 2004).
6th Circuit says abuse of trust and leadership increases did not “over-count” conduct. (431) Defendant, the superintendent of a city wastewater treatment plant, was convicted of violating the Clean Water Act. The district court applied a § 3B1.1 enhancement for defendant’s aggravating role in the offense and a § 3B1.3 increase for defendant’s abuse of a position of public trust. However, the court then departed downward, stating that the enhancements, if applied cumulatively, over-counted because “the offense in this case did not necessarily entail an abuse of trust that was separate and apart from the defendant’s position that permitted him to be a leader or organizer of the activity.” The court also said that the abuse of trust increase should be discounted because “a significant number of members of the general public did not enjoy a beneficial or quasi-fiduciary relationship with the defendant in his role as a public servant.” The Sixth Circuit rejected this reasoning. The abuse of trust increase was clearly proper. Defendant was a government employee, charged with the safe operation of the water treatment plant. He knowingly caused sewage sludge to be discharged into a navigable waterway and falsified reports. The members of the general public, who relied upon defendant to prevent water pollution in the area, were in a beneficial relationship with defendant. The aggravating role increase related to defendant’s role as a supervisor over others in the operation of the plant. Defendant directed others to discharge the sludge into a ditch, and directed technicians to change test results. Applying these increases cumulatively did not “over-count,” as each had elements that were not necessary for the determination of the other. U.S. v. Kuhn, 345 F.3d 431 (6th Cir. 2003).
6th Circuit says court could not exclusively rely on PSR to resolve disputed matter. (431) Defendant objected to the PSR’s recommendation that he receive a four-point enhancement for his leadership role in the offense. The district court overruled defendant’s objection, stating that it was denying the objections “for the reasons stated by the United States Probation Department.” Because the matter of leadership role was disputed by defendant in his objections to the PSR, the district court had an obligation under Rule 32 to issue a ruling on the disputed matter unless the matter would not affect sentencing or would not be considered in sentencing. The Sixth Circuit ruled that the district court did not comply with Rule 32, and remanded for a ruling on the disputed matter. The court never issued a specific ruling on whether the criminal activity involved five or more individuals or whether it could be considered extensive. In ordering the enhancement, the court exclusively relied on the reasoning of the probation department. However, exclusive reliance on the PSR when a matter is in dispute cannot be considered a ruling. U.S. v. Darwich, 337 F.3d 645 (6th Cir. 2003).
6th Circuit applies supervisor increase to defendant who recruited accomplice and exercised control. (431) There was uncontroverted evidence that defendant recruited Picos-Picos as an accomplice and exercised control over him. Defendant arranged for Picos-Picos to come from Tijuana to help defendant and leased an apartment for him. In return, Picos-Picos worked for defendant, delivering bags of cocaine and money, and keeping records of drug transactions for defendant. Defendant planned and directed all of Picos-Picos’s drug activities. The Sixth Circuit found this sufficient to establish that defendant was a supervisor within the meaning of the guidelines. U.S. v. Solorio, 337 F.3d 580 (6th Cir. 2003).
6th Circuit affirms leadership increase for supervising nephew. (431) The district court found that the role played by defendant in supervising his nephew Jason was in and of itself sufficient to support a § 3B1.1(c) leadership increase. Testimony indicated that defendant and Turner had recruited Jason into the scheme with an offer of monetary rewards. Defendant then instructed Jason to cash a refund check that would be mailed to him and claim that it was legitimately obtained. In addition, the record was “replete with other evidence regarding defendant’s involvement in carrying out the scheme and in his recruitment of other individuals.” The Sixth Circuit affirmed the § 3B1.1(c) sentencing enhancement. U.S. v. Finkley, 324 F.3d 401 (6th Cir. 2003).
6th Circuit upholds organizer increase for role in planning robbery of armored truck. (431) An armored truck was robbed at gunpoint while making its regular pick-up of cash and checks at a department store. At the time of the robbery, defendant was employed at the department store as a loss prevention officer and was at the scene when the robbery occurred. The two men who committed the robbery testified at defendant’s trial that defendant helped plan the robbery (using knowledge gained as the department store’s loss prevention officer and from former employment as a guard for an armored truck service), and that he supplied the gun used in the robbery. The Sixth Circuit affirmed a § 3B1.1(c) aggravating role increase. Although the court did not explicitly find that defendant led, organized, managed, or supervised any of the other participants, this finding could be inferred from the court’s enumerated facts. The key was that defendant supplied the gun and insider information about the store and the armored truck service. In this sense, he supervised the two robbers. U.S. v. Dupree, 323 F.3d 480 (6th Cir. 2003).
6th Circuit finds no plain error in accepting PSR’s recommendation where defendant did not object. (431) The PSR found that defendant directed the activities of two others in the drug transactions that formed the basis of the offense of conviction and found this evidence to be relevant conduct for purposes of § 3B1.1. Defendant did not object to this recommendation. Rule 32(b)(6)(D) provides that “Except for any unresolved objection under subdivision (b)(6)(B), the court may, at the hearing, accept the presentence report as its findings of fact.” Because defendant made no objections, the Sixth Circuit held that the district court did not commit plain error in accepting the PSR’s recommendation for enhancement. U.S. v. Garcia-Meza, 315 F.3d 683 (6th Cir. 2003).
6th Circuit holds that defendant was organizer or leader of gambling operation that supported RICO conviction. (431) Defendant was convicted of two counts of conspiring to engage in racketeering activity, and one count of conspiracy to commit extortion, in violation of the Hobbs Act. One of the underlying racketeering activities was a gambling operation owned and operated by Versaci (the Versaci Gambling Operation). The district court found that defendant was not an organizer or leader in the Versaci Gambling Operation, and refused to apply a § 3B1.1(a) increase. The Sixth Circuit reversed. The government’s theory of the gambling operation was that defendant was the financial backer of the operation and that the other participants could not act without defendant’s permission. In fact, defendant’s only alleged participation in the Versaci Gambling Operation was as its organizer or leader. The district court found that the Versaci Gambling Operation was an underlying offense of defendant RICO conspiracy conviction. If defendant agreed to the commission of the Versaci Gambling Operation, as the district court found that he did, then he must have done so as an organizer or leader. U.S. v. Tocco, 306 F.3d 279 (6th Cir. 2002).
6th Circuit holds that defendant was leader in extortion conspiracy. (431) The evidence supported the conclusion that defendant and Tocco started the extortion scheme as “partners” and that they carried out numerous acts of extortion together and in conjunction with others recruited into the conspiracy. Defendant’s argument that Tocco was more involved, and that it was Tocco who recruited various individuals into the conspiracy, did not alter the fact that defendant was a leader of the scheme. The Sixth Circuit therefore affirmed a § 3B1.1(c) leadership increase. U.S. v. Corrado, 304 F.3d 593 (6th Cir. 2002).
6th Circuit holds that defendant held leadership role in bank robberies. (431) Defendant was convicted of aiding and abetting in the commission of two armed bank robbery, and related firearms charges. The Sixth Circuit upheld the district court’s finding that defendant played an aggravating role in the offense. Steen testified that defendant told him to rob the bank and that defendant provided him the weapons and planned many of the details of the robberies. For instance, defendant selected the banks to be robbed, advised Steen as to the types of bills to request, and told him to shoot anyone who put dye in the bag. Steen also testified that defendant told him the escape route to take after he left the first bank. Steen further testified that Hawkins and defendant transported him to the banks and left him there to rob them. Moreover, Hawkins and defendant kept all of the money from the robberies, except for $50 that Steen stole from Hawkins when the latter’s back was turned. Thus, the record supported the finding that defendant controlled Steen, actions, planned and organized the details of the robberies, kept a large share of the fruits of the crime, and exercised decision-making authority with regard to the offenses. U.S. v. Davis, 306 F.3d 398 (6th Cir. 2002).
6th Circuit affirms managerial increase even though defendant did always act in that capacity. (431) The roles of the participants in the drug conspiracy were fluid, and defendant did not always act as an organizer or leader. For example, on one occasion defendant drove a van and conducted counter surveillance while a co-conspirator negotiated a drug deal. Defendant argued that an organizer or leader does not typically delegate negotiation and price-setting authority to his underlings while relegating himself to the task of driving around the neighborhood. However, the PSR and the testimony of Wilson described defendant as recruiting Wilson to collect drug debts, and making trips to California and Utah to procure methamphetamine. Defendant also organized the procurement in California, the transport to Memphis, and the repackaging and distribution there of a 13-pound quantity of meth. Defendant was “in charge” of distributing this quantity, and of exercising management and control over four other participants when he allocated it among them. The Sixth Circuit found these instances of organizational initiative and management power sufficient to support a § 3B1.1(C) increase. U.S. v. Bennett, 291 F.3d 888 (6th Cir. 2002).
6th Circuit upholds leadership increase based on variety of factors. (431) Defendant argued that a supervisor enhancement was improper because there was no evidence that he supervised or controlled any other participants. The district court, however, credited the testimony elicited at the sentencing hearing from an FBI agent who identified Hunt, a co-conspirator, as having been supervised by defendant. The district court further found that defendant qualified for the increase because he stated that he had two drug suppliers in the Detroit area; because the quantity of drugs found in defendant’s apartment was more than defendant could possibly have maintained for his personal use; and because a DEA agent had testified at trial that the supplies and quantities of drugs found in defendant’s apartment were typical of those possessed by a mid-level distributor. The Sixth Circuit found no error in the court’s decision to impose a leadership enhancement for defendant’s role in the enterprise. U.S. v. Taylor, 248 F.3d 506 (6th Cir. 2001).
6th Circuit holds that defendant was leader or organizer of bank robbery. (431) Defendant and an accomplice robbed a bank. A third man drove the getaway car. The Sixth Circuit upheld the district court’s finding that defendant was a leader and organizer in the bank robbery. He obtained the weapons used in the robbery and stole the getaway car. He was aware of one accomplice’s financial problems and offered him the option of participating in the robbery. He also proposed the bank robbery to both accomplices. He insisted that the accomplices follow through when they were hesitant to do so. Defendant thought of sending one accomplice in first because of his large size. Defendant directed the bank manager to fill the bag with money from the vault and the tellers’ drawers. U.S. v. Bandy, 239 F.3d 802 (6th Cir. 2001).
6th Circuit finds defendant supervised courier. (431) Defendant agreed sell an informant two pounds of “crystal.” A co-conspirator, Flores, eventually delivered 804.8 grams of amphetamine to the informant, who made a down-payment on the drugs. Defendant and the informant had further conversations regarding the sale of cocaine, and eventually cocaine was delivered by Flores. In addition, defendant continued to be involved in conversations regarding the payment for the original delivery of amphetamine. Defendant argued that he was not a manager or supervisor because he was working for Cisneros, who was the “kingpin” of the conspiracy. Defendant claimed that he only acted as a middleman between Cisneros and the informant and pointed to recorded statements in which he had to confer with his “bosses” to confirm the terms of the transaction. The Sixth Circuit affirmed the increase, since defendant supervised Flores. Defendant worked out the deal with the informant, made arrangements for Flores to deliver the drugs, and instructed the informant to wire a portion of the money directly to defendant. Defendant was in repeated contact with the informant and played a role in coordinating both the delivery of and payment for the amphetamine. U.S. v. Munoz, 233 F.3d 410 (6th Cir. 2000).
6th Circuit agrees that defendant was leader of drug conspiracy. (431) Defendant “directed codefendants to make payments, took profits from the drugs transactions from Saginaw, Michigan back to Texas, paid codefendant’s utilities, and was involved in planning and organizing the conspiracy.” The government also noted that trial evidence showed that defendant approved Walden as a courier, met him in Saginaw and asked him to deliver cash back to Texas, and visited Saginaw at time contemporaneous with Walden’s visits. Based on this evidence, the Sixth Circuit held that the district court did not err in applying a § 3B1.1(a) leadership enhancement. U.S. v. Hernandez, 227 F.3d 686 (6th Cir. 2000).
6th Circuit upholds leadership increase despite government citation of incorrect standard. (431) Prior to 1993, all that the Sixth Circuit required for a § 3B1.1 leadership increase was participation of at least two culpable persons “so that leadership of some criminal enterprise or organization, however minimal, could be claimed.” U.S. v. Paulino, 935 F.2d 739 (6th Cir. 1991). In November 1993, Application Note 2 to § 3B1.1 was amended to provide that the § 3B1.1 enhancement is required where the defendant exerts control over at least one participant. However, where a defendant does not exercise control over an individual but over property, assets, or activities, an upward departure may be warranted. U.S. v. Gort-DiDonato, 109 F.3d 318 (6th Cir. 1997). Defendant argued that his § 3B1.1 increase was improper because the government incorrectly cited the 1991 standard enunciated in Paulino. Although defendant was correct that the Paulino standard no longer applied, the Sixth Circuit found no evidence that the district court relied on Paulino. Moreover, there was sufficient evidence to justify the court’s conclusion that defendant was a leader, organizer, manager or supervisor. Defendant directed Robinson to find another name to whom checks could be addressed, and directed Robinson to obtain a money order with which to bribe a suspicious employee of a vendor. Further, Robinson asked defendant for permission to leave the conspiracy and defendant refused to allow him to do so. U.S. v. Caseslorente, 220 F.3d 727 (6th Cir. 2000).
6th Circuit holds that defendant held leadership role in counterfeiting ring. (431) The Sixth Circuit agreed that defendant held a leadership role in a conspiracy to produce and distribute counterfeit currency. Defendant was to receive a full 25 percent of the profits, while his partner was to split the rest with the six men recruited to pass the counterfeit bills. Defendant was involved in plans for the operation, and he selected and purchased the equipment and supplies used. He was also responsible for printing the counterfeit currency. It was defendant’s expertise alone that made the operation possible. The fact that his partner also took a leadership role did not preclude a leadership adjustment for defendant. See note 4 to § 3B1.1. U.S. v. Kelly, 204 F.3d 652 (6th Cir. 2000).
6th Circuit says defendant held leadership role in conspiracy involving more than five participants. (431) The district court applied a § 3B1.1(a) enhancement, finding that defendant was the organizer or leader of a drug conspiracy involving more than five people. Defendant argued that he was not leading five individuals. The Sixth Circuit noted that it was not necessary for a defendant to have led or directed five individuals to receive this sentencing enhancement. It applies if the defendant organized or led at least one participant, and the activity involved five or more people or was otherwise extensive. The evidence showed that defendant and Owusu were both leaders of the drug conspiracy. Although Owusu initially had the drug connection, they shared decision-making authority and jointly planned trips to New York to purchase drugs. Once defendant and Owusu obtained the cocaine, they would split it evenly and each would distributed his half independently. Defendant directed Peoples and McGraw in distributing his share of the cocaine. U.S. v. Owusu, 199 F.3d 329 (6th Cir. 2000).
6th Circuit holds that defendant held leadership role in prison riot. (431) Defendant was convicted of charges stemming from his participation in a prison riot. The Sixth Circuit found sufficient evidence to support a § 3B1.1(a) leadership enhancement. One witness testified that defendant encouraged other inmates to join the riot and encouraged violence. Defendant “stated for everybody to join him before the staff did a count.” Another witness testified that defendant yelled for the other inmates to takes a staff member’s keys and radio because “we have to come to get our people, let our people go.” A third witness testified that defendant also instructed inmates to get the staff’s video cameras. A final witness testified that defendant was yelling “[W]e can go in there and take the [other inmates] out[.] You all can’t stop us.” This evidence was sufficient, because it showed that defendant recruited other inmates to join in the riot and directed them what to do. U.S. v. Green, 202 F.3d 869 (6th Cir. 2000).
6th Circuit holds that defendant held managerial role in food stamp fraud scheme. (431) At their two convenience stores, defendants purchased federal food stamp coupons at a discount for cash. They then redeemed the coupons for full value by depositing the coupons in various bank accounts held in the name of the grocery stores. The Sixth Circuit agreed that defendant was a manager or supervisor in the scheme. He was responsible for opening and closing the various bank accounts that the two stores used in the scheme. Defendant had an employee named Davis who would pose as the owner of one of the markets and would open various bank accounts through which defendant passed the food stamps and deposited the funds. In addition, Davis would also pre-sign blank checks for defendant so that they could withdraw cash and avoid detection from authorities. U.S. v. Bahhur, 200 F.3d 917 (6th Cir. 2000).
6th Circuit rules refusal to apply organizer enhancement was clear error. (431) Defendant was convicted of racketeering and extortion charges. The Sixth Circuit held that the district court committed clear error in concluding that defendant did not have a supervisory role. The district court ignored the fact that the jury found defendant guilty on a Hobbs Act violation. The government’s theory of the case was that Nove and Corrado could not engage in their extortionate activities without the permission of defendant. The wiretapped conversations between Nove and Corrado showed that defendant was the “boss” and that he had control over the extortionate activities of his underlings. The jury found defendant guilty of conspiring to commit those extortionate activities in the Hobbs Act count, indicating that they found defendant to be the “boss” or “supervisor.” U.S. v. Tocco, 200 F.3d 401 (6th Cir. 2000).
6th Circuit applies increase for making decisions, managing conspirator and controlling drug proceeds. (431) The district court found that defendant made the decisions about the drug transaction, managed Ables during drug transactions, and exercised control over the proceeds of the drug conspiracy. The testimony of Pearce and Winesburgh, and of the agents who investigated defendant’s home and his mother’s home at the time of his arrest, supported these findings. Because consideration of the “entire evidence” did not lead to the firm conviction that the district court made a mistake, the Sixth Circuit upheld a two-level role in the offense enhancement. U.S. v. Layne, 192 F.3d 556 (6th Cir. 1999).
6th Circuit upholds managerial role of defendant who served as U.S. point man for Colombian drug dealer. (431) Defendant challenged a § 3B1.1(c) managerial enhancement, claiming he was merely a delivery person for a Colombian drug dealer and a conduit for collections. The Sixth Circuit affirmed the enhancement, agreeing with the government’s characterization of defendant as the “point person” within the U.S. for a fugitive Colombian drug trafficker. In addition to distributing heroin on behalf of the Colombian in the U.S., defendant organized a scheme to collect U.S. drug debts, periodically wiring the collected money to the dealer in Colombia. Defendant also exercised decision-making authority, and his role was integral to the commission of the offense. In addition to deciding who to recruit for the debt collection scheme, defendant made decisions on who to recruit for the distribution scheme. Finally, although defendant did not recruit co-conspirator Malone, it was clear that once he came to the U.S., defendant exercised control over Malone, deciding how much money to front to Malone, and instructing him in the method of wire transfers of money. U.S. v. Martinez, 181 F.3d 794 (6th Cir. 1999).
6th Circuit says failure to challenge leadership enhancement not ineffective assistance. (431) Defendant contended that his counsel was ineffective for failing to challenge a § 3B1.1 leadership role enhancement, contending that there was no evidence that he controlled the actions of any of his co-conspirators. The Sixth Circuit found that counsel was not ineffective for failing to challenge the enhancement, since there was more than sufficient evidence to establish defendant’s leadership role in the conspiracy. Defendant recruited Fields and others to serve as “runners” and sell crack cocaine, participated in the drug conspiracy by preparing crack cocaine, secured a location from which the drugs could be sold, and handled the drug proceeds. Wright v. U.S. 182 F.3d 458 (6th Cir. 1999).
6th Circuit upholds leadership enhancement for defendant with ultimate decision-making authority. (431) Defendant was convicted of various charges arising from the operation of a bingo hall in violation of Kentucky law. Defendant conceded that he managed the bingo hall, but argued there was no evidence to support a § 3B1.1(a) leadership enhancement. The Sixth Circuit held that the government met its burden of establishing that defendant was a leader. The district court found that defendant had ultimate decision-making authority with regard to the bingo operation, he recruited others to be a part of that operation, and exercised a high degree of participation, organization, and planning. U.S. v. Ables, 167 F.3d 1021 (6th Cir. 1999).
6th Circuit affirms leadership enhancement despite defendant’s claim that he was a “mule.” (431) Defendant was a member of a large marijuana distribution conspiracy spanning three states and involving two families. The Sixth Circuit affirmed a § 3B1.1(c) role in the offense enhancement, notwithstanding defendant’s claim that he was just a “mule” whose sole function was to pick up marijuana. The district court found that defendant supervised people–he “dealt with a variety of sources,” and while he may not have had a “sales staff,” he did have people who distributed marijuana on his behalf. Moreover, many of the other factors spelled out in the commentary were addressed by the district court. The fact that defendant testified that he was only a mule was not enough to counter the evidence to the contrary, especially in light of the court’s finding that defendant lacked credibility. U.S. v. Maliszewski, 161 F.3d 992 (6th Cir. 1998).
6th Circuit rules defendant was leader of conspiracy to obstruct justice. (431) Defendant’s son, a convicted felon, was charged with possessing 33 firearms. Several meetings were held at defendant’s house in order to discuss a plan in which individuals would falsely claim ownership of each of the guns. Defendant was convicted of conspiracy to obstruct justice and related charges. The Sixth Circuit upheld the court’s finding that defendant was an organizer or leader of the conspiracy. The majority of the discussions regarding the scheme took place at defendant’s home and at her behest. Defendant recruited people for participation, kept the list of who would testify as to ownership of which guns, and she met with each witness to go over their testimony. U.S. v. Miller, 161 F.3d 977 (6th Cir. 1998).
6th Circuit rules defendant held managerial role in telemarketing fraud. (431) Defendant worked for a telemarketing company that defrauded hundreds of elderly victims out of money by convincing them they had won a valuable prize. Defendant worked for the firm for nine months, during which time he became the top “reloader,” generating over $443,209. The Sixth Circuit approved a three-level managerial role enhancement under § 3B1.1(b). Defendant did not dispute that the criminal activity involved five or more people. Defendant trained salespeople by occasionally running sales meetings when the company’s president was absent. Defendant authored an advertisement using his own name to attract new salespeople to the organization. Defendant created a new promotion for the company to use, which was designed to solicit new victims. Defendant also helped rig a drawing from one promotion in order to keep the FBI at bay when a potential victim complained. U.S. v. Brown, 147 F.3d 477 (6th Cir. 1998).
6th Circuit affirms managerial role enhancement in drug conspiracy. (431) Defendant helped a drug conspiracy transport five loads of marijuana from Mexico to California to Detroit. The Sixth Circuit affirmed defendant’s managerial role in the conspiracy. Defendant was responsible for processing all the marijuana in California. He gave one conspirator directions as to where one delivery was to be made. He made all necessary arrangements for this conspirator when the motor home transporting the drugs broke down in Nevada. Another driver had defendant’s telephone number as her contact person when she was arrested with a load of marijuana. U.S. v. Gaitan-Acevedo, 148 F.3d 577 (6th Cir. 1998).
6th Circuit upholds leadership increase for negotiating drug sales and always using courier. (431) Defendant was convicted of crack cocaine charges. The Sixth Circuit upheld a § 3B1.1(a) leadership enhancement based on testimony that defendant always negotiated the drug sales and often used a co-defendant as his courier, referring to her as “his girl” when informing others that she would deliver drugs to them. U.S. v. Washington, 127 F.3d 510 (6th Cir. 1997).
6th Circuit affirms managerial enhancement for contact person when leader was not available. (431) Defendant participated in a drug conspiracy run by his brother. The Sixth Circuit affirmed a managerial role enhancement based on evidence that defendant was involved in planning marijuana transportation and distribution activities as well as directing others in the shipment and sale of marijuana. Defendant directed the actions of other co-conspirators, exercised decision-making authority, and was clearly the contact person if his brother was not to be found. U.S. v. Godinez, 114 F.3d 583 (6th Cir. 1997).
6th Circuit upholds § 3B1.1(c) increase for supervising a juvenile selling drugs. (431) Defendant was convicted of drug offenses. The Sixth Circuit affirmed a § 3B1.1(c) supervisor enhancement based on defendant’s supervision of a female juvenile who was concealing large quantities of cocaine from police when defendant was arrested. A witness testified that he watched the two sell drugs, with defendant handling the larger transactions and the juvenile handling the smaller ones. The juvenile followed defendant’s instructions to hide the cocaine as police approached. U.S. v. Clay, 117 F.3d 317 (6th Cir. 1997).
6th Circuit to decide if defendant controlled people or assets of extortion conspiracy. (431) Defendant and her boyfriend were involved in a scheme to extort money from her family to “protect” her from drug dealers who were allegedly stalking them. The district court imposed a § 3B1.1(c) leadership enhancement since defendant played a major role in planning the offense by selecting her relatives, assessing their finances, and persuading them to honor her requests. The Sixth Circuit remanded for the district court to determine whether defendant controlled people or assets of the extortion conspiracy. Before November 1993, a defendant need not have exercised control over a specific member of the conspiracy to receive the § 3B1.1(c) enhancement. However, under the November 1993 version of note 2, a defendant must exert control over at least one individual. If she exercises control over the property, assets or activities of a criminal organization, the court may depart upward. Here, the district court made no findings as to whether defendant exercised control over another participant. U.S. v. Gort-DiDonato, 109 F.3d 318 (6th Cir. 1997).
6th Circuit agrees that lawyer held managerial role in helping client conceal assets from IRS. (431) Defendant, a lawyer, was convicted of conspiring to conceal the assets of a client from the IRS. The Sixth Circuit affirmed a managerial role enhancement based on evidence that defendant recruited lawyers and accountants to participate in the scheme. Defendant also provided information about the client’s various holdings to the numerous accountants and lawyers working for the client. It was to defendant that these persons turned for information about the foreign shell corporation used to conceal the client’s assets. U.S. v. Kraig, 99 F.3d 1361 (6th Cir. 1996).
6th Circuit says leadership enhancement for gambling defendant was not double counting. (431) Defendant was convicted of operating an illegal gambling business. He argued that a leadership enhancement was double counting because the underlying offense and offense level already accounted for this factor. The Sixth Circuit held that the leadership enhancement was not double counting. The statute of conviction, 18 U.S.C. § 1955, also applies to those who do not lead or manage the enterprise. The base offense level of 12 under § 2E3.1(a) is not strictly applied to leaders or organizers—a defendant need only “engage” in a gambling business to receive this level. U.S. v. Wall, 92 F.3d 1444 (6th Cir. 1996).
6th Circuit says increase is mandatory if court finds defendant was leader and activity was otherwise extensive. (431) The Sixth Circuit held that the four level enhancement is mandatory once a court finds that defendant was a leader or organizer and the criminal activity involved five participants or was otherwise extensive. Here, the court made factual findings that would require a four level enhancement, but imposed only a two level enhancement. However, other portions of the sentencing hearing transcript suggested that the court was only giving its preliminary thoughts when it made those findings, and that it may have changed its mind during the hearing. The case was remanded for the court to clarify its findings. U.S. v. Sanders, 95 F.3d 449 (6th Cir. 1996).
6th Circuit does not require identity of five persons organized, only five participants. (431) Defendant received a § 3B1.1 enhancement for being the organizer or leader of an organization involving five or more participants. He argued that the district court failed to make a finding as to the identity of the five individuals whom he organized, relying on U.S. v. Stubbs, 11 F.3d 632 (6th Cir. 1993). The Sixth Circuit held that a court is not required to identify the five persons whom the defendant organized, but only the five participants in the criminal activity. Here, defendant was convicted along with six co-defendants of the conspiracy count charged in the indictment. There was sufficient evidence that defendant managed at least five of these six co‑defendants. Where a trial judge also presides over the sentencing, it is not improper for him not to make specific references about why he classifies a defendant as a leader or an organizer. U.S. v. Elder, 90 F.3d 1110 (6th Cir. 1996).
6th Circuit says five accomplices need not work for defendant to justify organizer increase. (431) The district court held that defendant was the supervisor or organizer of a drug conspiracy involving five or more other participants. Defendant challenged the § 3B1.1(a) enhancement on the ground that he did not have five subordinates working for him. The Sixth Circuit held that the enhancement merely requires five or more participants, not that they be subordinate to the defendant. Here, defendant and several others provided drugs to a number of dealers. They ordered the cocaine, contacted the supplier in New York, negotiated the purchase price and made arrangements for couriers to transport the cocaine from New York to Ohio. Defendant also was involved in making important decisions which allowed the gang to control drug trafficking in town and to use weapons or violence if necessary. U.S. v. Bingham, 81 F.3d 617 (6th Cir. 1996).
6th Circuit upholds double counting, ruling Romano is no longer good law. (431) Defendant was one of the four regular credit references for sham businesses that obtained merchandise on credit, sold the goods without making payments for them, and then disappeared. Relying on U.S. v. Romano, 970 F.2d 164 (6th Cir. 1992), defendant claimed that separate enhancements for more than minimal planning and leadership constituted impermissible double counting. The Sixth Circuit held that Romano was abrogated by a November 1, 1993 amendment stating that absent an instruction to the contrary, the adjustments from different guideline sections are applied cumulatively. Thus, the adjustments from both § 2F1.1(b)(2) and § 3B1.1 were properly applied in this case. U.S. v. Cobleigh, 75 F.3d 242 (6th Cir. 1996).
6th Circuit concludes defendant was manager of “bustout” fraud scheme. (431) Defendant was involved in a “bustout” fraud scheme in which a temporary business obtained merchandise on credit, sold the goods, made no payments for the goods, and then disappeared. The Sixth Circuit agreed that defendant was a manager of the fraud scheme. He rented a warehouse, operated the sham entity, caused losses to creditors exceeding $600,000, gave bogus credit references, and directed his wife to issue checks for some small portion of his purchases. U.S. v. Cobleigh, 75 F.3d 242 (6th Cir. 1996).
6th Circuit affirms leadership enhancement even though court did not specifically name each participant that defendant organized. (431) Defendant argued that he was a middleman, rather than a leader, in a drug conspiracy, and that he did not supervise a sufficient number of people to warrant a four level enhancement under § 3B1.1(a). The Sixth Circuit disagreed, based on evidence that defendant was a high level player in a drug conspiracy that, over the course of several years, brought large quantities of drugs into Lexington, Kentucky. Although the district court did not explicitly name the people organized by defendant, this issue was discussed during the sentencing hearing. In addition, when issuing its ruling, the district court referred to the eleven persons named in the indictment. U.S. v. Ghazaleh, 58 F.3d 240 (6th Cir. 1995).
6th Circuit says politician acting as own campaign treasurer supervised racketeering activities. (431) Defendant, a Kentucky state representative, was convicted of extortion, racketeering and making false statements to federal investigators. The 6th Circuit upheld a role in the offense enhancement under § 3B1.1(c). Defendant played a major role in the Hobbs Act violation. Acting as his own campaign treasurer, defendant supervised the activities underlying the mail fraud predicate to his racketeering offense. U.S. v. Blandford, 33 F.3d 685 (6th Cir. 1994).
6th Circuit upholds managerial enhancement for directing cocaine couriers. (431) Defendant claimed she was only a “go-between” in a drug organization and did not deserve a managerial enhancement. The 6th Circuit upheld the enhancement. Defendant gave instructions to two brothers transporting cocaine from California to Washington, D.C. She also took an active role in directing their delivery of the cocaine. U.S. v. Ledezma, 26 F.3d 636 (6th Cir. 1994).
6th Circuit upholds enhancement for manager of 20 “foot soldiers” who also brokered drug sale. (431) The 6th Circuit affirmed that defendant was the manager or supervisor of five or more participants under 3B1.1(b). There was testimony that defendant was the manager of 20 to 30 “foot soldiers” who sold drugs in the area. In this capacity, he obtained cocaine from suppliers and furnished it to street level dealers. He also brokered at least one sale and played a role in another. Since four defendants pled guilty to the conspiracy count, the criminal activity clearly involved at least five participants. U.S. v. Ferguson, 23 F.3d 135 (6th Cir. 1994).
6th Circuit approves manager enhancement where not all factors in commentary apply. (431) The 6th Circuit approved a managerial enhancement under § 3B1.1(b) where testimony showed that defendant arranged for the storage of cocaine in the United States, rented apartments for the Colombian participants, recruited people into the conspiracy and supervised those recruits. Defendant was also near the top of the hierarchy among non-Colombians and was a direct link between the Colombians and the Columbus participants. The fact that not all the factors listed in the commentary were applicable did not make the enhancement improper. U.S. v. Ospina, 18 F.3d 1332 (6th Cir. 1994).
6th Circuit upholds leadership enhancements for two defendants in marijuana conspiracy. (431) Defendants were convicted of a marijuana conspiracy. The 6th Circuit upheld a four level leadership enhancement under section 3B1.1(a) for both of them. The first defendant recruited accomplices to the crime (the drivers), paid the drivers for their work and was in control when the cars carrying the marijuana arrived at his garage in Texas. The second defendant negotiated shipments with a co-conspirator and charged him for the marijuana. The district court could properly find that the first defendant was the organizer-leader with regard to the drivers and “peons” in Texas, and the second defendant was the organizer-leader with regard to the Michigan connection. U.S. v. Garcia, 20 F.3d 670 (6th Cir. 1994).
6th Circuit says defendant need not profit from fraud scheme to be supervisory. (431) Defendant and his wife were convicted of defrauding the creditors of their partnership. He challenged an enhancement under § 3B1.1(c) for his supervisorial role in the offense on the ground that (a) only he and his wife were involved in the scheme, and (b) the enhancement is meant only for those who profit from their criminal activity, whereas he gambled away all the fruits of his illegal activity. The 6th Circuit upheld the enhancement. Defendant’s accountant and bookkeeper both testified at trial as to defendant’s organizational role in the partnership. In addition, it was defendant alone who solicited the bulk purchasers and arranged for the disposal of the fraudulently obtained inventory. Defendant’s claim that the enhancement only applied to a defendant who profits more from the enterprise than his accomplice was misplaced. U.S. v. Griffith, 17 F.3d 462 (6th Cir. 1994).
6th Circuit upholds organizer enhancement despite lack of direct control. (431) Defendant received a two level enhancement under section 3B1.1(c) for organizing an operation that imported illegal drugs into the country and distributed them in the community. The 6th Circuit upheld the enhancement despite the lack of evidence that defendant directly led, managed, or supervised others in the manufacturing, importation or distribution of the drugs. Defendant’s organization and coordination of this international distribution scheme were sufficient to qualify him as an “organizer” of criminal activity. U.S. v. Schultz, 14 F.3d 1093 (6th Cir. 1994)
6th Circuit defers to conclusion that defendant played managerial role. (431) Defendant’s sentence was enhanced for his managerial role in criminal activity. Noting that such decisions are “heavily dependent on the facts,” the 6th Circuit affirmed the district court’s determination as not clearly erroneous. Because the sentencing judge had presided over the trial, it was unnecessary for him to cite specific facts to support his role finding. U.S. v. Okayfor, 996 F.2d 116 (6th Cir. 1993).
6th Circuit permits organizer adjustment for defendant who paid and transported underlings. (431) The district court gave defendant a four-level upward adjustment as an organizer or leader of a marijuana conspiracy. Defendant had paid and transported lower ranking conspirators, hired some of them, allowed his vehicle and gun to be used in transporting marijuana, had two other vehicles registered to him that were found near a barn where marijuana was being stripped, and modified a fuel tank to permit concealment of marijuana. The 6th Circuit concluded that the district court’s decision was not clearly erroneous. U.S. v. Perkins, 994 F.2d 1184 (6th Cir. 1993).
6th Circuit affirms aggravating role for defendant who provided funds to purchase cocaine. (431) The 6th Circuit affirmed a two-level enhancement under section 3B1.1(c) based on defendants’ aggravating role in a drug conspiracy. Two conspirators testified at trial that they purchased cocaine with money they received from the first defendant. Another conspirator recounted that the second defendant had supervised his transport of cocaine and heroin from California to Detroit on several occasions. U.S. v. Medina, 992 F.2d 573 (6th Cir. 1993).
6th Circuit rules that reliance on information outside the record was harmless error. (431) Defendant argued that in imposing a leadership enhancement under section 3B1.1(c) the district court improperly relied on information adduced at a co-defendant’s plea hearing, which defendant was not given a sufficient opportunity to challenge. The 6th Circuit ruled that this was harmless error. First, the other evidence fully supported the judge’s ultimate finding that defendant was a leader. Defendant himself had testified that the co-defendant worked for him, albeit in a legitimate capacity. Defendant was seen issuing orders to the co-defendant, and following one transaction, he handed a small sum of money to the co-defendant while retaining the lion’s share. Second, advance notice of the potential for reliance upon this information would not have provided defendant with any additional incentive or ability to challenge its accuracy. U.S. v. Patrick, 988 F.2d 641 (6th Cir. 1993).
6th Circuit affirms leadership enhancement for defendant who directed car dealer to put title in others’ names. (431) Defendant was convicted of structuring transactions to evade reporting requirements after purchasing several luxury cars with $9,000 cash and numerous smaller cashier’s checks, and then placing title to the car in others’ names. The 6th Circuit affirmed a two-point leadership enhancement under section 3B1.1(c) based upon evidence that defendant negotiated each purchase and instructed the car dealer to put to each car in the name of either his girlfriend or sister. Moreover, there was evidence that defendant supplied the money to purchase the cars. The evidence suggested that the money came from defendant’s cocaine trafficking. Furthermore, none of the other co-defendants had enough legitimate income to explain the expenditure of over a quarter of a million dollars on five cars during a 17-month period. In addition, the presentence report indicated that the girlfriend, though a willing participant in the purchase of two of the cars, acted under defendant’s direction. U.S. v. Akrawi, 982 F.2d 970 (6th Cir. 1993).
6th Circuit holds that leadership role in relevant conduct justified enhancement. (431) Defendant held a leadership role in a criminal operation that constituted relevant conduct for the offense of conviction. The 6th Circuit held that defendant’s leadership role in the relevant conduct mandated a two point enhancement under section 3B1.1. Judge Cohn dissented. U.S. v. Ushery, 968 F.2d 575 (6th Cir. 1992).
6th Circuit upholds organizing role of defendant who directed others to pick up heroin for him. (431) Defendant was convicted of drug conspiracy charges as a result of his involvement in the purchase of heroin. The 6th Circuit upheld an organizing role enhancement based on the testimony of the co-conspirator who delivered the heroin to defendant that persons other than defendant actually picked up the heroin. U.S. v. Markarian, 967 F.2d 1098 (6th Cir. 1992).
6th Circuit holds that “participants” are not the same as “subordinates” for managerial purposes. (431) Defendant received an enhancement under section 3B1.1(b) for being the manager or supervisor of criminal activity that involved five or more participants or was otherwise extensive. Defendant challenged the enhancement since he only supervised two persons. The 6th Circuit upheld the enhancement, since the guideline refers to five or more “participants,” not subordinates. There clearly were five or more participants in defendant’s offense: in addition to defendant and the two employees he concededly supervised, there were at least two other individuals involved in the scheme. U.S. v. Dean, 969 F.2d 187 (6th Cir. 1992).
6th Circuit affirms that copyright infringer was supervisor. (431) Defendant, a video store owner, was convicted of duplicating and distributing copyrighted movies. The 6th Circuit upheld a two-level enhancement under section 3B1.1 based upon his supervisorial role over an individual who printed labels for the movies. Although the individual was not formally charged, the district court found on the basis of his testimony that he had engaged in culpable behavior. He testified that he acted at the direction of defendant, printed labels and knew that his behavior was wrong. U.S. v. Cohen, 946 F.2d 430 (6th Cir. 1991).
6th Circuit remands because court incorrectly added only two points for leadership role. (431 Defendant argued that the district court erred in imposing a two-level enhancement for being a leader of an operation involving 5 or more people. The 6th Circuit rejected defendant’s argument that he was not a leader, but found the district court did err in imposing only a two-level enhancement. Guideline § 3B1.1(a) requires a four-level enhancement for being a leader of an operation involving 5 or more persons. The evidence at trial indicated that defendant (a) recruited a co- conspirator to act as a courier between California and Ohio, (b) made arrangements with the suppliers in California, and (c) made arrangements for the distribution of the marijuana in the Akron area, including “fronting” another co-conspirator large amounts for the sale. The testimony also established that four other people were participants in defendant’s drug trafficking scheme. U.S. v. Feinman, 930 F.2d 495 (6th Cir. 1991).
6th Circuit upholds leadership enhancement where trial testimony established involvement of five other participants. (431) The 6th Circuit upheld a four-point enhancement based upon defendant’s role as a leader or an organizer in a drug conspiracy involving five or more participants. The district court found that defendant was the “clear leader” of a conspiracy which involved the use of defendant’s stepson and wife to distribute drugs. Trial testimony established that two other individuals were involved in transporting cocaine from Miami to eastern Michigan. Trial testimony further established that another individual was also involved in the drug operation. U.S. v. Alvarez, 927 F.2d 300 (6th Cir. 1991).
6th Circuit affirms leadership role for drug defendant. (431) The 6th Circuit affirmed the district court’s finding that defendant was an organizer of a drug transaction. Defendant was the one who originally contacted the undercover informant to sell him drugs, and all contacts with the undercover informant were by defendant, not his co-defendant. Defendant was observed canvassing houses, presumably collecting the cocaine. Finally, defendant was observed leaving his own residence with a paper bag which contained cocaine. U.S. v. Gonzales, 929 F.2d 213 (6th Cir. 1991).
6th Circuit holds that evidence supported finding that defendant was leader or organizer of drug conspiracy. (431) Drug defendant challenged the four level offense level enhancement under § 3B1.1(a), claiming that the district court erred in finding that he was a “leader or organizer”. The 6th Circuit affirmed the enhancement, finding that the evidence at trial that showed the defendant directed other members of the conspiracy to transport cocaine, that he employed others to travel in cars equipped with secret compartments to transport cocaine, that he directed others to transport cash receipts from the sale of drugs, and that he directed others to distribute large amounts of cocaine. The 6th Circuit held that these were not clearly erroneous findings and the enhancement was proper. U.S. v. Castro, 908 F.2d 85 (6th Cir. 1990).
6th Circuit upholds “organizer” role for defendant who “set up” the cocaine transaction. (431) The 6th Circuit found that defendant’s admission that he set up a cocaine transaction sufficient to support the sentencing court’s characterization of him as an organizer. The court also upheld an “organizer” finding as to a co-defendant. The co-defendant stated in a recorded conversation that it was his fault that a prior “deal” fell through. Moreover, after making five telephone calls to negotiate a meeting, he personally delivered almost four ounces of cocaine to an undercover detective. The findings that defendants were “organizers” were not clearly erroneous. U.S. v. Williams, 894 F.2d 208 (6th Cir. 1990).
6th Circuit upholds finding that defendant had a “managerial” role in offense. (431) Defendant argued that the evidence only showed a buyer/seller relationship in a drug transaction and did not prove that he was a manager. The 6th Circuit affirmed the sentence, holding the district court’s finding was not clearly erroneous. The defendant had supplied a large amount of drugs, fronted money for drugs, built a house without a loan and participated in transactions over a four year period. U.S. v. Barrett, 890 F.2d 855 (6th Cir. 1989), abrogation on other grounds recognized by U.S. v. Moore, 225 F.3d 637 (6th Cir. 2000).
6th Circuit upholds finding that defendant was an “organizer, leader, manager, or supervisor.” (431) A drug trafficker was sentenced to 97 months imprisonment after the District Court increased his offense level from 28 to 30. A government witness testified that the defendant had supplied him with 10 ounces of cocaine which he had agreed to sell to an undercover agent. In addition, the witness testified that the defendant had supplied him with cocaine seven other times in recent months. Basing the sentence on this testimony was not clearly erroneous, and the district court could properly increase the guidelines by two offense levels based on its finding that the defendant was an “organizer, leader, manager, or supervisor.” U.S. v. Perez, 871 F.2d 45 (6th Cir. 1989).
7th Circuit holds that defendant was leader of drug conspiracy despite his incarceration. (431) Defendant ran a crack cocaine distribution ring in Quincy, Illinois. With the help of his brother, defendant continued to manage the conspiracy while incarcerated following a firearm conviction. Defendant challenged on appeal a four-level leadership enhancement under § 3B1.1(a). He argued that his brother was the real leader, and that at most, he deserved the lesser enhancement for acting as a manager or supervisor. The Seventh Circuit upheld the four-level enhancement. Although defendant was incarcerated during the majority of the conspiracy, he continued to exercise decision-making authority, directing his brother on points of strategy and discipline. The prison phone system recorded defendant telling his brother how much cocaine to purchase at a time for resale, the brother relating the details of the operation for defendant’s approval, and defendant asking his brother to send him some of the proceeds of the conspiracy. Defendant also directed his brother to beat another man that defendant suspected of talking to police, and recruited members of the conspiracy. U.S. v. Purham, __ F.3d __ (7th Cir. June 9, 2014) No. 13-2916.
7th Circuit says managerial role enhancement was not plain error. (431) Defendant participated in a multi-faceted fraudulent check-cashing operation involving his creation of fraudulent documents with the names of people and fictitious businesses. He challenged for the first time on appeal a three-level increase under § 3B1.1(b) for being a manager or supervisor in a scheme involving five or more participants. The Seventh Circuit found no plain error. At sentencing, defendant conceded that he managed or supervised two other participants in the scheme. Defendant also admitted in his plea declaration that he recruited and instructed Kormoi to open mail drops in false names using fraudulent identification that one or the other provided, and he recruited and directed Henderson to do the same, as well as to deliver to him fraudulently obtained credit cards and other items from the mail drops. Defendant then paid Kormoi and Henderson for their work. U.S. v. Arojojoye, 753 F.3d 729 (7th Cir. 2014).
7th Circuit says defendant’s large role in coordinating co-conspirator’s activities supported enhancement. (431) Defendant and his cousin sold crack cocaine to an FBI informant on three occasions. Before the first sale, defendant instructed his cousin to deliver a sample of the cocaine to the informant, and to tell the informant the price for larger amounts. For each sale, defendant and the informant discussed the quantity of drugs to be sold and the price, and defendant told the informant to pick up the cocaine at his cousin’s house. Defendant instructed his cousin to accept the informant’s payment and ensure that the informant took possession of the cocaine. During these transactions defendant waited in another room or outside until each sale was complete. After each sale the cousin turned the money over to defendant, who then gave the cousin a share of the profits but kept a larger portion for himself. The Seventh Circuit upheld a § 3B1.1(c) leadership increase. The facts here support the district court’s conclusion that defendant supervised his cousin: defendant set the price and quantity, obtained the cocaine from his supplier, instructed the cousin to deliver a sample and oversee the sales, and distributed the proceeds from the sales, always keeping more for himself. U.S. v. May, 748 F.3d 758 (7th Cir. 2014).
7th Circuit rules defendant who hired man to burn down her house held leadership role. (431) Defendant solicited White to burn down her house so that she could collect a settlement from her insurance company. The Seventh Circuit upheld a two-level organizer or leader enhancement under § 3B1.1(c). Defendant led the conspiracy: She hatched the idea to burn down her house and collect the insurance proceeds; recruited White to carry out the plan; told White which day to set the house afire; planned to keep most of the profits from the offense; and attempted to maximize the money that she hoped to receive from the insurance company by inflating the insurance claims, filing a frivolous lawsuit against the company, and lying under oath at her deposition in that case. U.S. v. Hargis, 747 F.3d 917 (7th Cir. 2014).
7th Circuit holds that drug supplier exercised control sufficient to support § 3B1.1 enhancement. (431) For several years, defendant supplied most of the cocaine that his 22 co-conspirators sold in Illinois and Missouri. The district court applied a § 3B1.1 role enhancement, finding that defendant had exercised control and played a coordinating or organizing role. The finding was based on transcripts of 13 phone calls between defendant and others; on a co-conspirator’s testimony that defendant gave him orders; and on defendant’s threats to retaliate if his co-conspirators were stealing from him. The Seventh Circuit upheld the enhancement. First, the district judge reasonably interpreted the phone calls with co-conspirators and various threats against them as a form of supervision, going beyond merely supplying cocaine and urging prompt payment. Second, defendant provided a van for transporting cocaine and even showed a co-conspirator the trap compartment in the van for hiding drugs. U.S. v. Ruelas-Valdovinos, 747 F.3d 941 (7th Cir. 2014).
7th Circuit agrees that defendant held leadership role in real estate fraud conspiracy. (431) Defendant was part of a conspiracy that preyed on novice real estate investors during the housing bubble in 2005-06, defrauding both borrowers and lenders alike. He challenged a § 3B1.1(c) enhancement, claiming (1) he only recruited three of the seven buyers; (2) the district court improperly considered whether he was “essential” to the offense; and (3) he did not exercise control over at least one other participant in the scheme. The Seventh Circuit upheld the enhancement. Defendant recruited Mark and Mengich in addition to the three buyers he admitted to recruiting. The court did not err in noting that defendant was an “essential” player in the scheme, since it was just one consideration among many. Finally, defendant exercised control over Mark, and she was a criminally responsible party. She admitted to fraudulent activities when she signed a HUD-1 statement showing she had made a “major down payment” on the house. That she was also a victim did not prevent her from being a “criminally responsible” party for sentencing purposes. U.S. v. Causey, 748 F.3d 310 (7th Cir. 2014).
7th Circuit says court did not rely solely on defendant’s nicknames in applying leadership increase. (431) Defendant was convicted of racketeering and related charges based on his involvement in a criminal enterprise that distributed video gambling devices to local bars and restaurants. To protect their business, the enterprise bombed a rival video gambling business. The enterprise also made money from armed robberies targeting jewelry stores. Defendant challenged a four-level leadership enhancement under § 3B1.1(a), arguing that the government’s only evidence that he was a leader, as opposed to a manager or supervisor, were his nicknames: “my guy,” “big guy,” and so forth. The Seventh Circuit disagreed, noting that the district court extensively analyzed the jointly undertaken criminal activity for relevant conduct purposes, and noted the “words of approval” that defendant uttered to Polchan, a co-conspirator, when discussing the distribution of video gambling machines. These words “clearly indicat[ed] a supervisory position over what was taking place.” U.S. v. Volpendesto, 746 F.3d 273 (7th Cir. 2014).
7th Circuit finds five or more participants in drug operation. (431) Defendants, two brothers, were involved in the distribution of cocaine and marijuana. They challenged a four-level leadership enhancement under § 3B1.1(a), contending that the district court erred in determining that their criminal activity involved five or more participants. The Seventh Circuit found no clear error. One of the disputed participants, Rochel, often fronted large quantities of cocaine to defendants on credit. Intercepted phone calls between Rochel and one defendant revealed that their drug relationship involved shared goals. The fact that defendants did not exercise control over Rochel was immaterial. A defendant need not exercise control over four other participants for the enhancement to apply; he “need control only one participant.” The other disputed participant was more than simply the girlfriend of one defendant. She knowingly assisted the brothers’ organization by allowing them to store drugs at her residence, and by occasionally delivering cocaine to one brother at his direction. U.S. v. Zuno, 731 F.3d 718 (7th Cir. 2013).
7th Circuit holds that owner of construction company held organizer role in fraud scheme. (431) Defendant, the owner of a construction company, was involved in an elaborate fraud scheme, centered around the development of an affordable housing project in Illinois. Even though the record clearly reflected that defendant was the sole mastermind behind this scheme, and recruited additional accomplices as he deemed necessary, defendant argued that a § 3B1.1(a) organizer enhancement was in error as he was not the organizer of a unified criminal plot. He admitted he had “associations” with people he used to further his criminal conduct, but argued that those associates’ roles were too limited in scope and objective for them to be considered. The Seventh Circuit disagreed and upheld the enhancement. Although defendant recruited each additional participant to perform specific illegal handiwork, that did not diminish his culpability as an organizer under § 3B1.1(a). Defendant alone owned the construction business at the center of the scheme, and he alone had decision-making control over every aspect of the crime. Defendant chose who was recruited, for what purpose, and solely determined each participant’s appropriate compensation. U.S. v. Rosen, 726 F.3d 1017 (7th Cir. 2013).
7th Circuit holds that defendant was leader of six-man criminal gang that stole trucks. (431) Defendant was a member of a six-man gang of thieves that stole trucks from truck yards and sold the cargoes to fences. Two members of the gang were mechanics who would break into trucks and hot-wire them. Two other gang members drove the trucks to the lots where the cargoes were sold to the fences. Defendant and his brother had the contacts with the fences and arranged the transactions with them. The Seventh Circuit upheld a § 3B1.1(a) leadership or organizer enhancement, ruling that the judge could properly find defendant’s role as contact person made him the gang’s leader. The defendant knew what the fences wanted, and found unguarded truck yards containing trucks likely to contain cargoes that the fences would buy. The fences paid him for the cargoes and he split the money among the gang’s members (including himself). Thus, he was the paymaster. He also brought his brother and one other person (a driver) into the gang, so was a recruiter, and he searched out warehouse space in which to store stolen merchandise to await directions from the fences. U.S. v. Rosales, 716 F.3d 996 (7th Cir. 2013).
7th Circuit affirms that defendant was leader of kidnapping and robbery scheme. (431) Defendant and seven confederates held a drug dealer captive for more than 12 hours while they robbed his home, transported him across state lines, and demanded that he give them money and drugs. The Seventh Circuit found ample evidence to support the district court’s § 3B1.1(a) leadership enhancement. One confederate testified that defendant not only discovered the location of the dealer’s home but also determined the timing of the crime (as well as the timing of the unsuccessful attempt the previous night), the group’s plan once the dealer told them of his supposed marijuana stash in Chicago, and each participant’s share. The dealer also fingered defendant as the primary man who beat and interrogated him, and a second confederate testified that defendant believed that the dealer and his employer owed him a personal debt. This testimony demonstrated defendant’s significant level of planning, involvement in the crime, and degree of control over others. The evidence also strongly suggested that defendant kept a large share of the $15,000 taken from the dealer for himself because of his belief that the crime was “his move.” U.S. v. Reynolds, 714 F.3d 1039 (7th Cir. 2013).
7th Circuit agrees that defendant held manager or organizer in drug distribution conspiracy. (431) Defendant participated in a massive cocaine-distribution conspiracy stretching from Mexico to Milwaukee. The Seventh Circuit upheld a § 3B1.1 manager or supervisor increase, finding that defendant’s role easily satisfied the guideline definition. Defendant brought Gregory into the cocaine-distribution scheme. Then, for three years, defendant fronted Gregory kilos of cocaine, directed Gregory where and when to pick up the drugs and cash, and told Gregory how much to sell the product for. Defendant also verified Gregory’s drug-dealing procedures and directed Gregory to remove the tinted windows on his car so that law enforcement would not find the car suspicious. And more importantly, defendant controlled the method by which he and Gregory communicated, providing Gregory with new cell phones every few months and deciding the proper time to switch phones. This was more than a mere buyer-seller relationship. Defendant was actively involved in what Gregory was doing (i.e., selling the cocaine he received from defendant), how he was doing it, where he was doing it, and when he was doing it. U.S. v. Collins, 715 F.3d 1032 (7th Cir. 2013).
7th Circuit finds fraud schemes were otherwise extensive. (431) Defendant participated in various fraudulent, Ponzi-like schemes that duped victims into investing millions of dollars in programs that were destined to fail. She challenged a three-level supervisor enhancement under § 3B1.1(b), claiming that the scheme did not involve five “criminally responsible” people. The Seventh Circuit declined to decide the number of participants, since the entire scheme easily satisfied the alternative “otherwise extensive” provision. A scheme is otherwise extensive if the number of participants, plus outsiders who unwittingly advance a conspiracy, is greater than five. The participation of defendant and her two co-defendants, plus board members and employees of defendants’ company satisfied the “greater than five” standard, regardless of whether the board member and employee were criminally responsible. The scheme was also extensive with respect to the amount of money obtained (over $18 million), the intended geographic scope (at least six states), the number of people affected (over 3,000), and the overall complexity (using straw buyers to facilitate housing transactions). U.S. v. Fluker, 698 F.3d 988 (7th Cir. 2012).
7th Circuit upholds supervisor increase for defendant who recruited co-conspirators and supervised offense. (431) Defendant and two co-conspirators stole more than half-million dollars from the bank where defendant worked as a teller. The Seventh Circuit upheld a three-level supervisor enhancement under § 3B1.1(b). According to co-conspirators, defendant initiated the scheme, played a leading role in recruiting the co-conspirators, and supervised the execution of the staged robberies from outside the bank. She then took custody of the proceeds and divided the money among the co-conspirators. On these facts defendant might have qualified for the “organizer or leader” enhancement, but the district court surely had a sufficient factual basis to apply the lesser “manager or supervisor” enhancement. U.S. v. Grigsby, 692 F.3d 778 (7th Cir. 2012).
7th Circuit upholds leadership increase. (431) Defendant was a middle manager in a drug enterprise. He supervised Cruz, who obtained heroin in Texas and transported it to defendant in Chicago for further distribution. The Seventh Circuit affirmed a § 3B1.1(c) leadership increase. Defendant “lucked out” to only get a two-level increase. Although there were only four confirmed participants, the enterprise was “otherwise extensive.” Defendant paid for Cruz and his family to fly from Chicago to Texas, and the purpose of having Cruz with his family was to make the trip seem innocent. The family members were outsiders involved in the drug enterprise. In addition, defendant made a number of heroin-bearing trips to Chicago, and in the one that led to defendant’s arrest, was carrying 37 kilograms of heroin, with a wholesale value of $2.5 million. A drug operation that handles such large quantities is likely to have at least five participants, even if they could not be identified. U.S. v. Figueroa, 682 F.3d 694 (7th Cir. 2012).
7th Circuit holds that defendant held managerial role in international online auction fraud. (431) Defendant was a Romanian national who resided in the U.S. illegally while participating in an international scheme to defraud online auction bidders. When victims wired funds to purchase items they had won, co-schemers inside the United States, including defendant, would pick up the payments using false identification. The domestic co-schemers would keep a percentage of the proceeds for themselves, and send the remainder to the co-schemers in Romania. The Seventh Circuit upheld a §3B1.1(c) managerial role enhancement. The PSR found that defendant: (1) received information from foreign co-schemers regarding funds being sent by victims and distributing this information to his crew; (2) directed his crew to receive victims’ funds using a variety of aliases; (3) obtained counterfeit alias identification documents for co-schemers; and (4) directed co-schemers to transmit funds to foreign co-schemers. The defendant even admitted in his plea that he held a managerial role. The fact that defendant was not the only schemer with these duties was immaterial. U.S. v. Cerna, 676 F.3d 605 (7th Cir. 2012).
7th Circuit upholds reliance on witness even though judge found parts of his testimony unreliable. (431) The government alleged that defendant managed or supervised an operation in which various couriers transported drugs and money between Chicago, Illinois, and Columbus, Ohio. Defendant challenged the district court’s finding that the criminal activity involved five or more participants, for purposes of a managerial role adjustment under § 3B1.1(b). He contended that the district court’s finding that the two unnamed couriers were participants was based only on unreliable testimony by Aguilera, a cooperating witness. The Seventh Circuit found no error. The situation was distinguishable from U.S. v. Johnson, 999 F.3d 1192 (7th Cir. 1993), where the court rejected an agent’s hearsay testimony that defendant used unidentified teenagers to distribute crack. Aguilera’s testimony was not hearsay. He testified at trial and was subject to thorough cross-examination. Although the judge found other portions of Aguilera’s testimony to be unreliable, the judge was entitled to reject only the specific aspect she found unreliable, while accepting those aspects she found reliable. U.S. v. Smith, 674 F.3d 722 (7th Cir. 2012).
7th Circuit finds defendant was leader of scheme to get unemployment benefits for illegal immigrants. (431) Defendant aided undocumented immigrants in filing claims for Illinois unemployment benefits. She charged an $80 fee to prepare and submit applications to the Illinois Department of Employment Security (IDES). Defendant challenged for the first time on appeal a four-level leadership adjustment, claiming she did not have control over and did not organize the individuals who came to her for assistance. The Seventh Circuit found no plain error. Defendant did not merely refer customers to Snell, a co-conspirator at the IDES office. Instead, she exercised near total control over the entire scheme. She received payment up front to fill out the unemployment insurance applications, which then remained in her sole possession until she turned them over to Snell. She recruited others to help in her efforts, including her boyfriend. After benefits were awarded, she was responsible for calling to certify continuing eligibility. Vasquez created a PIN for each claimant and had the ability to reroute checks if she was not compensated. Through these payments, defendant received a large share of the proceeds of the criminal activity. U.S. v. Vasquez, 673 F.3d 680 (7th Cir. 2012).
7th Circuit holds that food stamp fraud was “otherwise extensive.” (431) Defendant operated several grocery stores that made phony sales for food-stamp recipients looking to exchange their benefits for discounted amounts of cash. He challenged his receipt of a four-level organizer or leadership enhancement under § 3B1.1(a), contending that the scheme was not “otherwise extensive” and did not involve five or more participants. The Seventh Circuit upheld the four-level enhancement. Defendant ran his scheme from multiple locations, traded cash for benefits with “probably hundreds” of customers, and supervised employees at his stores. U.S. v. Hussein, 664 F.3d 155 (7th Cir. 2011).
7th Circuit upholds managerial role enhancement for defendants who exerted limited control over nominee buyers. (431) Defendants were involved in a mortgage fraud scheme—their company bought residential properties and then sold those properties to nominee buyers at inflated prices. The Seventh Circuit held that the district court did not clearly err in applying an offense level enhancement for being an organizer or leader of the criminal activity. Although defendants’ degree of control over the nominee buyers may have been limited, the nominee buyers still answered to defendants when it came to falsifying the information provided to the lenders. Thus, the buyers could be fairly said to have operated under defendants’ control. U.S. v. Robertson, 648 F.3d 858 (7th Cir. 2011).
7th Circuit directs court to reevaluate leadership increase in light of co-defendant’s entrapment defense. (431) Defendant was arrested when authorities made a controlled delivery of marijuana. The district court applied a § 3B1.1(a) leadership enhancement, concluding that defendant exercised decision-making authority by paying the driver, signing for the shipment, recruiting accomplices to help unload the shipment, and paying at least two of them with bricks of marijuana. The Seventh Circuit held that the district court’s findings were not clearly erroneous. Nevertheless, the case had been remanded based on a co-defendant Lara’s entrapment claim. On remand, the court should reconsider of whether the four-level enhancement was still warranted. The increase had been premised on defendant’s leadership of a conspiracy that involved five or more people. If Lara was entrapped into committing the charged conduct, the number of participants dropped to four. Moreover, the court should consider the fact that the undercover agent had refused to let defendant unload the truck alone, and instructed him to return the next day with more people and equipment. If the agent had not refused to let defendant unload the truck alone, three workers would not have become involved in the matter, reducing the number of participants to two. U.S. v. Pillado, 656 F.3d 754 (7th Cir. 2011).
7th Circuit approves managerial enhancement where defendant had authority over two conspirators. (431) Defendant was convicted of drug conspiracy charges, and received a three-level enhancement under § 3B1.1(b) for his role in the offense. The Seventh Court found no clear error in the district court’s conclusion that defendant was a manager or supervisor of the drug conspiracy. The record demonstrated that the conspiracy leader, Iniguez, sent defendant to Kentucky on two separate occasions to oversee the receipt and distribution of drugs, despite the fact that two other conspirators were already there. The fact that Iniguez exercised authority over the two co-conspirators did not preclude the district court’s finding that defendant also had such authority. Moreover, defendant acted as a sounding board for Iniguez by discussing the organization and planning of the drug conspiracy with Iniguez on a somewhat regular basis, and was entrusted with substantial sums of money. U.S. v. Vallar, 635 F.3d 271 (7th Cir. 2011).
7th Circuit agrees that defendant held managerial role in drug distribution conspiracy. (431) Defendant pled guilty to conspiracy to possess and distribute heroin, cocaine, and crack cocaine. The Seventh Circuit upheld a § 3B1.1(b) managerial enhancement. Although defendant challenged the credibility of Harris, the government witness, the court did not base the enhancement solely upon Harris’ testimony. Several factors supported the enhancement. First, defendant exercised decision-making authority and a degree of control over others. Defendant supplied Harris and others with packs of crack and heroin to sell around “the Square,” a housing project in Chicago. Defendant exercised discretion in determining the amounts of crack and heroin that others would sell, and was also responsible for directing customers seeking drugs to other workers around the Square. Second, defendant was involved in the recruitment of accomplices. Third, defendant had the claimed right to a larger share of the drug proceeds. For every pack of crack that Harris sold, he kept only $10-$30 of the $50-$150 proceeds, and defendant collected the remainder. U.S. v. Curb, 626 F.3d 921 (7th Cir. 2010).
7th Circuit says scheme involved five or more participants. (431) Defendant was the mastermind of an extensive real estate scheme using grossly inflated property appraisals and false loan applications. He challenged a § 3B1.1(a) increase for being the leader of criminal activity that involved five or more participants or was “otherwise extensive,” because only four people were found criminally responsible. The Seventh Circuit affirmed the four-level enhancement, noting that a person need not be convicted to be criminally responsible. The district court accepted the government’s argument that the fifth participant in the scheme was Miller, who although never criminally charged, admitted that she knowingly participated in the scheme by advancing funds on loans that had not closed. Even absent a finding that Miller was criminally responsible for purposes of § 3B1.1(a), her involvement would still indicate that the scheme was “otherwise extensive” since defendant made use of her services. U.S. v. Knox, 624 F.3d 865 (7th Cir. 2010).
7th Circuit finds defendant was manager where he recruited driver, negotiated price, and was main contact. (431) Defendant was a conspirator in a drug distribution ring. The district court applied a two-level enhancement under § 3B1.1(c) because he satisfied the definition of a manager/supervisor under § 3B1.1(c). The Seventh Circuit affirmed. First, defendant was in charge of recruiting the driver. Second, although defendant had to get confirmation from his fellow conspirators, he was in charge of negotiating the price with the driver who was to transport the drugs from Texas to Indiana. Finally, defendant was involved in the process from start to finish. He first secured the driver, without which the conspiracy would have been still-born. He was the main contact for the driver (in fact, an undercover agent) and was in charge of coordinating meetings between the driver and another conspirator, including the initial pickup of the drugs. The court recognized that while supplying drugs or negotiating their sale does not, by itself, justify an enhancement, defendant had more involvement than simply supplying or negotiating. U.S. v. Doe, 613 F.3d 681 (7th Cir. 2010).
7th Circuit upholds managerial role for exercising decision-making authority and being viewed as leader. (431) Despite substantial evidence pointing to defendant’s role as a leader in a drug conspiracy, he challenged a § 3B1.1 enhancement, arguing that he was just a middleman. He contended that because he was working at the direction of a supplier in Mexico, he was not a manager or supervisor. The Seventh Circuit found this argument meritless. First, there was evidence that defendant exercised decision-making authority. He decided when the drug shipment would leave Texas, the fee paid to the driver, and the amount that a conspirator would pay to buy marijuana. Second, the other participants viewed him as the leader, and the evidence supported their perception. Third, he participated significantly in planning the offense. The district court properly found that defendant did more than simply supply the drugs. U.S. v. Doe, 613 F.3d 681 (7th Cir. 2010).
7th Circuit sees no error in factors used to find criminal activity “otherwise extensive.” (431) Defendant pleaded guilty to bankruptcy fraud after he and his wife engaged in a scheme to conceal assets from the bankruptcy court. At sentencing, defendant conceded he should receive a two-level enhancement under § 3B1.1 because he was an organizer or leader of the criminal activity, but argued that he should not receive a four-level enhancement because the criminal activity in which he engaged was not “otherwise extensive.” The district court imposed a four-level enhancement, finding that the scheme took place over an extended period of time, involved a large amount of money ($2.5 million), was highly orchestrated, and involved the assistance of several other people. The Seventh Circuit held that the district court’s method of computing extensiveness was “entirely proper” and that the district court did not rely on factors that were counted elsewhere in the Guidelines. U.S. v. Diekemper, 604 F.3d 345 (7th Cir. 2010).
7th Circuit upholds role enhancement. (431) Defendant pled guilty to conspiring to distribute or possess with intent to distribute heroin and cocaine. Defendant challenged a § 3B1.1(c) role enhancement, arguing that it could not be applied unless he exercised some element of control over another participant in the offense. The Seventh Circuit held that the district court did not clearly err in finding that defendant occupied a managerial or supervisory role in the offense. Even if control over another participant was required, there was evidence that defendant exercised control over Mendoza. Mendoza told agents he had packed the money in the suitcase at the direction of defendant and that he had done so on other occasions. In addition, defendant admitted he was in Chicago to oversee drugs and drug proceeds for a Mexican cartel, which suggested he played a coordinating or organizing part in the criminal activity. U.S. v. Gonzalez-Mendoza, 584 F.3d 726 (7th Cir. 2009).
7th Circuit agrees that defendant who lectured other conspirators on failed drug deal was manager. (431) Defendant was a member of a gang heavily involved in trafficking heroin, cocaine, and crack cocaine in the Chicago area. Defendant challenged a § 3B1.1(b) managerial role enhancement, contending that Murray, not he, was Rocco’s boss. Defendant said he was a mere middle man with no managerial function in the enterprise. The Seventh Circuit disagreed. First, more than one person can qualify as a leader or organizer of a criminal conspiracy. Second, an officer testified that he observed defendant lecturing Rocco at a McDonalds about how to avoid law enforcement. The district court reasonably understood that defendant was disciplining Rocco and the other unidentified individuals for a failed transaction. The court reasonably inferred that a person who lectured other drug conspirators about how to conduct their business was a manager. U.S. v. Are, 590 F.3d 499 (7th Cir. 2009).
7th Circuit finds defendant was a leader based on his admissions, informants, and other information. (431) The district court found that defendant was a leader or organizer of a drug conspiracy based on the following evidence: (1) defendant admitted in his plea agreement to buying and redistributing wholesale quantities of cocaine and heroin; (2) a confidential informant stated that defendant was the leader of the street gang; (3) a recorded phone call in which defendant told a co-conspirator to tell the dealers to be “careful” matched up with testimony that defendant instructed his people to be “careful” after several members had been arrested; (4) while another conspirator lectured other conspirators on evading police, defendant acted disinterested and was observed walking away, giving the impression that he was not controlled by the other conspirator; (5) defendant was the “conduit of information” for all participants; and (6) Fauntleroy stored large amounts of cocaine for defendant. The Seventh Circuit affirmed the leadership increase. Much of the evidence provided by the informant was corroborated by other reliable evidence. U.S. v. Are, 590 F.3d 499 (7th Cir. 2009).
7th Circuit rules defendant was leader in day spa that provided sexual massages. (431) Defendant helped run a day spa at which she and other workers provided sexual massages to spa customers. She challenged a 3B1.1(b) leadership increase, claiming that although she had administrative responsibilities that other workers at the spa did not, her role was akin to that of a bookkeeper who collected the spa’s proceeds and paid its bills under the direction of the spa’s owner, and who had no meaningful influence over the activities of any other employee. The Seventh Circuit upheld the enhancement. Defendant acted as the owner’s proxy in overseeing the spa’s day-to-day affair; she collected the proceeds, paid the cook/housekeeper her daily wage, was responsible for the ledger, and paid the bills. She reported to the owner when there were problems with other employees. There was also evidence that defendant hired employees, including the cook/housekeeper. and that defendant decided, upon a customer’s arrival, which of her co-workers would provide a massage to the customer. This was sufficient to support the enhancement. U.S. v. Young, 590 F.3d 467 (7th Cir. 2009).
7th Circuit finds gang leader was also leader of drug conspiracy. (431) Defendant participated in a long-running conspiracy involving the distribution of large amounts of drugs by the Black Disciples street gang in Chicago. He challenged a four-level leadership enhancement, arguing that he was only a leader of the Black Disciples gang, not a leader of the drug conspiracy. The Seventh Circuit disagreed, finding a “mountain of evidence” establishing defendant’s role as a leader of the drug conspiracy. Nine different co-conspirators testified that defendant was the king of the Black Disciples and was extensively involved in directing the gang’s drug operation. They testified that defendant controlled the entire organization, provided drugs to gang members to sell, controlled more than 15 drug-selling locations, made thousands of dollars a day from drug sales, collected payments from street-level drug dealers, laundered drug money through real estate, resolved disputes among gang members, and disciplined gang members who broke gang rules. The government also introduced evidence seized from defendant’s apartment, which included letters from other gang members who acknowledged his leadership role and asked for money or assistance. U.S. v. White, 582 F.3d 787 (7th Cir. 2009).
7th Circuit relies on statement by “biased” absent witness to support leadership increase. (431) Defendant was involved in a cocaine conspiracy with Rodriguez and Perez. The Seventh Circuit held that the record supported the district court’s finding that defendant played an aggravating role in the conspiracy. Rodriguez allowed defendant to store two kilograms of cocaine at his house at defendant’s request, in exchange for $100. A drug dealer’s recruitment of an accomplice supports application of § 3B1.1. The district court did not clearly err in finding that defendant’s recruitment of Rodriguez to store the cocaine qualified defendant for the § 3B1.1(c) enhancement. Although Rodriguez did not testify at trial, was a fugitive, and may have been motivated to downplay his own role in the conspiracy, these considerations did not require the district court to reject his post-arrest statements and admissions in his plea agreement. The testimony of a biased witness need not be corroborated by other evidence to justify the district court’s reliance on such testimony. The record also supported the reasonable inference that defendant controlled Perez. Defendant made arrangements with Perez to sell the cocaine and instructed Perez to go to Rodriguez’s house to pick up the cocaine and then return with the money. U.S. v. Mendoza, 576 F.3d 711 (7th Cir. 2009).
7th Circuit allows government to refuse to move for reduction where defendant refuses to waive right to appeal. (431) Defendant met all of the requirements under § 3E1.1(b) for an additional one-level acceptance of responsibility reduction, except that the government refused to file a motion. Its refusal was based on defendant’s refusal to waive his right to appeal his conviction or sentence. Defendant argued that if the premise of the motion was established, (i.e. the defendant has assisted authorities in the investigation or prosecution of his own misconduct by timely notifying authorities of his intent to plead guilty), the government must file the motion. The Seventh Circuit disagreed. Subsection (a) of § 3E1.1 confers an entitlement on the defendant – if he satisfies the criteria in the subsection, he is entitled to the two-level acceptance reduction. However, subsection (b) confers an entitlement on the government – if it wants to give the defendant additional credit for acceptance of responsibility, and the defendant meets the criteria, it can file the motion. There was nothing unreasonable about the government’s decision not to file a motion in this case. U.S. v. DeBerry, 576 F.3d 708 (7th Cir. 2009).
7th Circuit approves leadership increase based on witness testimony and defendant’s admission to giving orders. (431) Defendant was convicted of drug charges. The Seventh Circuit held that the evidence adequately supported a leadership enhancement. Witnesses testified that defendant was the “chief” of a faction of a street gang, and controlled the drug business in a particular territory. He procured various harmful illegal drugs from a number of suppliers, employed and directed workers to mix and repackage them, and operated a variety of drug spots using other employees. For other dealers, defendant charged rent for the right to sell within his territory and attempted to control the locations where those dealers set up shop. Defendant attempted to downplay his role in the charged conspiracy, but even the facts he raised supported the leadership enhancement. For example, he pointed out that alleged co-conspirators admitted to ignoring some of his orders, which necessarily implied that he was indeed giving orders, a characteristic consistent with a leadership position. U.S. v. Longstreet, 567 F.3d 911 (7th Cir. 2009).
7th Circuit says defendant’s use of runners warranted managerial role increase. (431) Defendant pled guilty to conspiracy and attempt to distribute more than five kilograms of cocaine. The Seventh Circuit upheld a three-level managerial role enhancement. The increase was supported by testimony that defendant, rather than accepting the cocaine shipments personally, directed his associates to pick up the drugs. A drug dealer’s delegation of delivery or payment task may warrant the imposition of a § 3B1.1 enhancement. Defendant’s use of “runners” to take actual possession of the cocaine after he finalized the logistics of the delivery made him a manager of the criminal activity. U.S. v. Sainz-Preciado, 566 F.3d 708 (7th Cir. 2009).
7th Circuit finds sufficient evidence that defendant was directing others in drug conspiracy. (431) Defendant argued that there was insufficient evidence in the record to support the district court’s finding that he was an organizer of the drug conspiracy, and the evidence relied on by the district court was unreliable. The Seventh Circuit upheld the enhancement. Although there were conflicts in the statements of some of the witnesses, it was not clear error for the district court to find that the statements supported the conclusion that defendant was providing direction for two others in the conspiracy. In addition, other circumstances supported the conclusion that defendant was directing the others. For example, on two occasions, a buyer called defendant to order crack cocaine. Defendant agreed to make the sale and arranged a time and place to meet, but someone other than defendant showed up to make the exchange. U.S. v. Fox, 548 F.3d 523 (7th Cir. 2008).
7th Circuit says defendant who coordinated drug shipments, hired drivers and recruited others was a manager. (431) Defendant was convicted of a drug conspiracy. The Seventh Circuit upheld the court’s finding that defendant was a manager or supervisor. Defendant coordinated three substantial shipments of drugs. He hired at least one of the two drivers, he supervised the leasing of all three trailers, he recruited another man to recover drugs from the hidden compartments when the trucks arrived in Chicago, and he commanded the man to attend to details like preparing the warehouse for deliveries, buying a cell phone, and picking up defendant and his brother at the airport. Orchestrating or coordinating activities performed by others makes a particular defendant a manager or supervisor. U.S. v. Martinez, 520 F.3d 749 (7th Cir. 2008).
7th Circuit finds defendant was leader in conspiracy to rob drug dealer. (431) A police informant invited defendant, an attorney, to participate in a robbery of a drug dealer. Defendant readily accepted. The Seventh Circuit upheld the district court’s finding that defendant held a leadership role in the offense. Defendant exercised decision-making authority, telling the informant he wanted to be involved, structuring the robbery to include police officers, and recruiting other participants. Defendant even made the decision to delay the robbery until the dealer could “money up.” The court also did not err in finding that the conspiracy involved at least five persons: defendant, a corrupt police officer, and three individuals in the car that sped off with the dealer’s duffel bag of money. During the robbery, one grabbed the bag, one acted as a lookout, and another as a getaway driver. U.S. v. Millet, 510 F.3d 668 (7th Cir. 2007).
7th Circuit agrees that loan sharking operation involved five or more participants. (431) Defendant operated numerous gambling parlors and provided loans to patrons and others at high rates of interest. When borrowers could not meet these inflated terms, defendant would show up with various associates and gang members to forcibly demand payment. The district court applied a four-level increase under § 3B1.1(a) for being a leader of criminal activity that involved five or more participants or was otherwise extensive. The Seventh Circuit held that the government proved that the activity involved five or more participants. There was evidence that Zhou Mei, Peter Lai, and numerous members of the Toi Ching gang participated with defendant in “debt collection” incidents in which people were threatened or actually physically harmed. Lai also admitted to the FBI that he, Zhou Mei, and two others participated in the beating of Ging Hong. U.S. v. Dong Jin Chen, 497 F.3d 718 (7th Cir. 2007).
7th Circuit upholds leadership enhancement for illegal fireworks dealer. (431) Based on his illegal sale of fireworks, defendant was convicted of dealing in explosive materials without a license, in violation of 18 U.S.C. § 842(a)(1), and knowingly receiving explosive materials in interstate commerce, in violation of 18 U.S.C. § 842 (a)(3)(A). The evidence showed that another person improperly allowed defendant to use his ATF fireworks license; that defendant instructed an employee to re-label boxes containing the illegal fireworks to avoid detection by the authorities; and that at least seven other people helped defendant re-label, purchase, and store illegal fireworks. On the basis of this evidence, the Seventh Circuit held that the district court properly gave defendant a four-level enhancement for being an organizer or leader of a criminal activity that involved at least five participants. U.S. v. Shearer, 479 F.3d 478 (7th Cir. 2007).
7th Circuit holds that defendant held leadership role in loan fraud scheme. (431) Defendant was convicted of mail and wire fraud in connection with a scheme to obtain real estate loans through false representations. The Seventh Circuit affirmed a § 3B1.1 aggravating role enhancement, agreeing that defendant was an organizer or leader of the scheme. In conjunction with an associate, defendant identified suitable straw buyers and directed their every move, from signing fraudulent loan agreements to assuming false identities. U.S. v. Radziszewski, 474 F.3d 480 (7th Cir. 2007).
7th Circuit holds that pawn shop owner who sold stolen goods on eBay held aggravating role. (431) Defendants and her son used pawn shops she owned as a front for selling stolen goods on eBay. The goods had been stolen by a group of shoplifters. Previously, the group had been stealing goods and returning them to the stores for cash, but new store policies made this increasingly difficult. The Seventh Circuit upheld a organizer or leader enhancement under U.S.S.G. § 3B1.1 for both defendant and her son. First, the offenses to which they pled guilty was wire fraud, and the underlying fraud was the passing off of stolen goods as legitimate to unsuspecting eBay customers. As the purveyors of the merchandise, defendant and her son were at the forefront of that fraud. Their co-defendants had nothing to do with their eBay sales. Second, defendant and her son provided an outlet for the stolen merchandise that the thieves sorely needed. They enabled the thieves to circumvent the problem of store returns, supplied them with a guaranteed income on their thefts, and enabled them to continue stealing on a relatively large-scale basis. Third, defendants directed the efforts of the thieves, frequently specifying what items they wanted them to steal, naming brands, model numbers and quantities they wanted. Defendants even provided the thieves with cash for interstate road trips. U.S. v. Wasz, 450 F.3d 720 (7th Cir. 2006).
7th Circuit says leadership increase did not require control over four other participants. (431) Defendant planned the robbery of a credit union, and personally recruited three accomplices to help her. The plan was a failure, and the foursome went to the house of one conspirator’s brother. The brother’s wife took them to the basement to wash up (one robber was covered in red dye), and the brother disposed of the robber’s clothes and other signs of their presence. Another brother drove the robbers home, with the two of the robbers hiding in the trunk. The two brothers and the wife all knew about the robbery plot before hand. The Seventh Circuit affirmed a § 3B1.1(a) leadership increase, rejecting defendant’s claim that the offense did not involve five or more participants. The brother’s efforts to hide the robbers made the ride home part of the getaway, not a favor for family and friends. Moreover, defendant did not challenge the finding that the other brother and his wife were participants in her opening brief; therefore the argument was waived. The enhancement did not require defendant to have exerted control over at least four other participants besides herself. All that was required was that the defendant provide leadership for a criminal enterprise comprised of five or more persons and actually control at least one participant. U.S. v. Blaylock, 413 F.3d 616 (7th Cir. 2005).
7th Circuit upholds organizer increase for defendant who conducted meetings and established terms of deal. (431) Defendant was convicted of conspiring to possess and transport goods stolen from an interstate shipment. He challenged a § 3B1.1(a) organizer or leadership increase, arguing that he was more like a middleman or broker, not the top man. The Seventh Circuit found no clear error in the court’s characterization of defendant’s role in the offense. Organizers do not necessarily control anyone but nonetheless influence the criminal activity by coordinating its members. Defendant was much more than a middleman who brought together willing sellers and buyers. He also conducted meetings to establish the terms of the deal, including product and price; he recruited a lead buyer who was putting together a group to purchase the full shipment; and he determined the details and logistics of the delivery. U.S. v. Skoczen, 405 F.3d 537 (7th Cir. 2005).
7th Circuit upholds managerial role increase for role in counterfeit check scheme. (431) Defendant was involved in a scheme involving the use of counterfeit checks to obtain money and goods. Trial testimony indicated that defendant acted as a recruiter for the bank fraud scheme, that he gave instructions to third parties on how they should proceed, and that he provided the counterfeit checks. The Seventh Circuit found this was a sufficient basis for imposing a § 3B1.1 managerial role enhancement. U.S. v. George, 363 F.3d 666 (7th Cir. 2004).
7th Circuit upholds leadership increase based on testimony of subordinate and undercover agent. (431) Defendant was convicted of drug crimes, and he received a sentence enhancement for his leadership role in the enterprise. Although defendant argued that he played no greater role than any of his co-defendants, testimony by Valdovinas and an undercover agent indicated that defendant directed Valdovinas’s actions and that he was not on an equal footing with defendant. Valdovinas served as a messenger for defendant, and defendant instructed Valdovinas to accompany defendant on trips to sell drugs. This testimony also established that defendant provided the cocaine to be sold illegally and provided a car with a secret compartment in which to hide the drugs. The Seventh Circuit agreed that this testimony was sufficient to establish defendant’s role and the leadership increase was not clear error. U.S. v. Falcon, 347 F.3d 1000 (7th Cir. 2003).
7th Circuit agrees that defendant was manager of drug conspiracy. (431) The district court found that Colon was the leader and defendant was a manager or supervisor in a conspiracy of five or more participants. Trial testimony showed that Colon replaced Souffront with defendant as regional boss. Another conspirator testified that after the search of Souffront’s apartment, the conspirator was told by defendant that defendant was now the boss. On one tape, Colon told a conspirator, “I want everybody to go through [defendant] … and that’s it.” The Seventh Circuit found that the evidence supported a § 3B1.1(b) managerial role increase. U.S. v. Souffront, 338 F.3d 809 (7th Cir. 2003).
7th Circuit says leadership increase for CCE defendant was not improper. (431) Defendant was convicted of numerous drug-related offenses, including engaging in a continuing criminal enterprise under 21 U.S.C. § 848(a). The CCE count required the jury to determine that defendant “organized, supervised, or managed five or more persons within the same time period charged in the indictment in committing the series of offenses.” The Seventh Circuit rejected defendant’s argument that his § 3B1.1 leadership enhancement in conjunction with the CCE conviction resulted in improper double-counting. The CCE sentence was imposed under § 2D1.5, excluding any enhancement for a leadership role. The leadership increase was imposed based on his role in a conspiracy, in violation under 21 U.S.C. § 841. U.S. v. Souffront, 338 F.3d 809 (7th Cir. 2003).
7th Circuit holds that defendant was leader of drug gang. (431) In 1995, defendant was elected to the position of “Inca” (the leader of the gang) by his fellow gang members. Audio tapes of gang meetings revealed defendant inquiring about who was doing security on “Nation Days” (a day when all members of the gang were required to sell crack and remit the proceeds to the gang’s treasury) and directing enforcers to do their jobs. Further, the government presented evidence that defendant determined when Nation Days would take place and how often, and that he presided over the meetings at which the leaders of the gang discussed their drug business. Defendant’s primary argument was that it was Hernandez, the gang’s treasurer, who really directed the activity on Nation Days. However, defendant neglected to mention that he was the one who personally appointed Hernandez to serve in this role. Moreover, defendant did not dispute that an organization can have more than one leader. The Seventh Circuit held that the district court did not commit clear error in finding that defendant was a leader of this conspiracy. U.S. v. Hernandez, 330 F.3d 964 (7th Cir. 2003).
7th Circuit upholds leadership increase based on role in relevant conduct. (431) Defendants conspired to defraud the IRS by placing the profits of an illegal offshore sports bookmaking operation in offshore bank accounts. The district court grouped the tax conspiracy offenses with the wagering offenses under U.S.S.G. § 3D1.2(c), and then applied a four-level increase for being the leader or organizer of criminal activity involving more than five participants. Defendants argued that they were not organizers of the tax conspiracy, and that the district court should have applied the § 3B1.1 adjustment prior to grouping, as required by § 1B1.1(d). The Seventh Circuit concluded that defendants were subject to the organizer/leader increase regardless of whether the wagering offense and tax conspiracy offenses were analyzed separately or grouped together, and therefore did not address whether the grouping of these offenses was proper. Defendant conceded that they were leaders or organizers of the bookmaking operation, but contended that their participation in the tax conspiracy was limited to their role as clients of Tedder. However, the determination of whether a defendant is an organizer or leader is to be made on the basis of all relevant conduct. There was no question that defendants’ operation of a multi-jurisdictional offshore bookmaking empire was relevant in assessing their role in the tax conspiracy. Judge Posner dissented, finding that it was error to group the offenses. U.S. v. D’Ambrosia, 313 F.3d 987 (7th Cir. 2002).
7th Circuit affirms supervisory increase where witness testimony was consistent with videotape. (431) Defendant challenged a § 3B1.1 supervisory role enhancement, arguing that a videotape of a drug transaction to which the court expressly referred when it imposed this adjustment was ambiguous and that Gonzales, rather than defendant, was in charge. Although the videotape was ambiguous, the Seventh Circuit nonetheless upheld the supervisory increase because both Gonzales and Orr testified that it was defendant who was the leader and Gonzales was the assistant taking orders. The district court was well aware of the incentives that Gonzales and Orr might have had to lie, and nonetheless chose to credit their testimony. There was nothing in the videotape to contradict their version, and in fact it was consistent with their testimony. The tape showed defendant speaking to Gonzales in Spanish, and then Gonzales translating for Orr, just as they said. Thus, while the videotape was probably not enough, the district court had direct testimony that supported the increase. U.S. v. Hernandez, 309 F.3d 458 (7th Cir. 2002).
7th Circuit affirms aggravating role increase based on co-defendants’ testimony. (431) At trial, the prosecution offered the testimony of defendant’s two co-defendants as proof that defendant was the leader of the group. Contrary to defendant’s statements, the co-defendant stated that defendant had recruited them, and thereafter met with them to plan the robbery, chose the financial institution to be robbed, gave each of them directions as to what part they were to play in the robbery scheme, and devised a plan to distribute the money they secured. Given these facts, the Seventh Circuit held that an aggravating role enhancement was not clearly erroneous. U.S. v. Owens, 308 F.3d 791 (7th Cir. 2002).
7th Circuit upholds increase even though court did not identify by name persons defendant supervised. (431) The district court found that defendant was a manager or supervisor of a Chicago street gang that was engaged in drug trafficking. The district court found that defendant’s management of at least one “drug spot” required him to use several individuals who could sell drugs, transport money and drugs, and secure the spot, and that this supported a § 3B1.1(b) managerial role enhancement. However, the court did not name any participants. The Seventh Circuit affirmed the managerial role increase, finding that a court need not identify by name the person or persons whom the defendant managed or supervised. So long as the court’s findings and the underlying evidence make clear that the criminal enterprise involved at least five culpable participants and that the defendant actually managed or supervised one or more of these individuals, the lack of evidence as to the name of the person that the defendant supervised should not foreclose the managerial role increase. Here, the court pointed to specific evidence indicating that defendant had managed or supervised other criminally culpable participants in the gang’s drug operations. U.S. v. Mansoori, 304 F.3d 635 (7th Cir. 2002).
7th Circuit upholds role increase for ordering others to unload drug shipment. (431) The district court applied a § 3B1.1 increase for the supervisory role that defendant played in the execution of a drug transaction that involved five or more participants. The Seventh Circuit found ample evidence to support the increase. First, Sanchez testified that when bags of charcoal were unloaded from the targeted truck, defendant ordered up to eight individuals to separate the contents of the bags. Sanchez also testified that, upon seeing that the bags contained marijuana, he and several of the men unloading the truck stopped working, only to continue when defendant promised the payment of more money. When police raided the warehouse where the unloading of the truck was taking place, defendant and five other individuals ran. This suggested that these men know that they were participating in an illegal activity. U.S. v. Gallo-Vasquez, 284 F.3d 780 (7th Cir. 2002).
7th Circuit holds that evidence supported managerial role increase. (431) In recommending a § 3B1.1(b) increase for defendant’s managerial role in a check kiting scheme, the PSR noted that defendant directed and supervised the actions of Angie, Daniel, and Mota: driving Angie to the bank, giving her money to open a bank account, driving her to withdraw money, driving her to cash a check and purchase money orders; driving Daniel to the credit union and instructing him to withdraw money, taking Daniel to Western Union and giving him money to send wire transfers to persons unknown to Daniel; and giving money to Mota and driving him to Western Union to place wire transfers on two occasions. Although Angie, Daniel and Mota were not charged as co-conspirators, all three testified at defendant’s trial as to the criminal scheme in which they were involved. Defendant also directed the actions of a co-conspirator’s aunt and involved his own brother in the conspiracy. In addition to specifically adopting the findings of the PSR at sentencing, the district court relied on the evidence presented at trial and noted that the government had carried its burden of proof by a preponderance of the evidence. The Seventh Circuit ruled that these findings were sufficient to support the § 3B1.1 increase. U.S. v. Gracia, 272 F.3d 866 (7th Cir. 2001).
7th Circuit affirms leadership increase for role in relevant conduct. (431) Defendant occupied a relatively low position in the charged drug conspiracy, acting primarily as a driver who retrieved marijuana for the conspirators and delivering it to their home. However, in November 1997, defendant began a marijuana operation of his own, which he ran without involvement of any of the principals of the charged conspiracy. Because defendant supervised Stafne during this related conduct, the district court applied a § 3B1.1(c) supervisorial role increase. Because defendant’s counsel did not dispute that defendant’s drug operation was relevant conduct, and expressly conceded that his direction of Stafne was the kind of activity that would qualify as management or supervision under § 3B1.1, the Seventh Circuit affirmed the increase. Section 3B1.1 provides for an increase based upon the defendant’s role in the “offense.” The guidelines define “offense” as the offense of conviction plus all relevant conduct. U.S. v. Bjorkman, 270 F.3d 482 (7th Cir. 2001).
7th Circuit holds that defendant was leader of white supremacist group. (431) Defendant and others formed a white supremacist group that intended to raise money by robbing banks and armored cars. The district court applied a § 3B1.1(a) increase for being the leader or organizer of a criminal activity that involved five or more participants or was otherwise extensive. The court explained that while there did not appear to be an “iron clad” group, there was a group of people (15 of whom the judge named) involved in the conspiracy to acquire illegal weapons, some of whom were more involved than others. The court adopted the PSR’s finding that defendant “recruited members and associates, assigned tasks to the group members, planned and organized the acquisition and storage of weapons, … scheduled all meetings and exercised control and authority over other members of the group.” The Seventh Circuit affirmed. There was ample evidence in the record to support the conclusion that defendant was the central figure in the conspiracy. U.S. v. McGiffen, 267 F.3d 581 (7th Cir. 2001).
7th Circuit affirms leadership increase for defendant who set up transaction and recruited brother. (431) Defendant sold cocaine to a confidential informant, and brought his brother with him to the sale. Both were convicted of drug charges. In applying a § 3B1.1 leadership increase, the district court found that defendant involved his brother in the offense, had decision making authority, expected a larger share of the profits, and obtained the cocaine himself by traveling to Mexico. In spite of defendant’s argument that he was nothing more than a “glorified mule,” the Seventh Circuit affirmed the increase. Section 3B1.1(c) does not require an explicit finding that the defendant exercised control, “so long as the criminal activity involves more than one participant and the defendant played a coordinating or organizing role.” It was evident from the record that defendant possessed sufficient responsibility to support the enhancement from the fact that he obtained the drugs, set up the time and place for delivery, recruited his brother as an accomplice, and claimed rights to $17,000 out of $19,500 per kilogram of cocaine. U.S. v. Carrera, 259 F.3d 818 (7th Cir. 2001).
7th Circuit holds that defendant had sufficient control over five participants to support leadership increase. (431) The district court applied a leadership enhancement, finding that defendant had more than a buyer-seller relationship with Spaeth, Jobe, Burke, Groff, and Henning. Defendant provided drugs for the whole distribution scheme, controlled the drug price and delivery, and fronted drugs to Spaeth. He used his compatriots to insulate himself from some of the perils of dealing by directing them to engage in the necessary but risky behavior of transporting and storing drugs. Defendant frequently used Jobe, Henning, Groff and Burke as mules to deliver his drugs to buyers. He stored drugs at Spaeth’s trailer and in Jobe’s car, and retained a key to Spaeth’s trailer so he could access the drugs when Spaeth was not home. Defendant exercised particular control over Spaeth and Henning because they depended on him to supply their own drug habit. Defendant exercised such psychological control over Burke that Burke agreed to go to jail for defendant. Based on all of this, the Seventh Circuit affirmed the leadership increase. U.S. v. Noble, 246 F.3d 946 (7th Cir. 2001).
7th Circuit upholds managerial role for defendant who coordinated activities of another. (431) The record supported a finding that defendant coordinated Stott’s activities for some part of the drug conspiracy. Bonner testified that defendant introduced Stott to him and told Bonner that Stott would be meeting him to pick up drugs. Bonner did offer potentially inconsistent testimony on whether Stott was merely a courier for defendant or instead, a customer in his own right. At trial, Bonner testified that Stott was not a customer of his, leaving an inference that Stott was defendant’s courier. At the sentencing of another conspirator, however, when Bonner was asked who his customers were, he included Stott in the list. The Seventh Circuit found this testimony was not necessarily inconsistent; Stott could have both transported cocaine on behalf of defendant and purchased cocaine from Bonner for his own use. Because there was evidence that defendant coordinated Stott’s activities for some part of the conspiracy, the role in the offense enhancement was not clearly erroneous. U.S. v. Stott, 245 F.3d 890 (7th Cir. 2001).
7th Circuit holds that defendant was leader of counterfeit check cashing scheme. (431) Defendant was a member of a criminal enterprise that recruited illegal immigrants to cash counterfeit checks in various states. Defendant used his home as the base of operations, dispatching teams of illegal immigrants, each headed by a group leader, to cash counterfeit corporate checks throughout the U.S. The Seventh Circuit affirmed a § 3B1.1(a) leadership role because, in addition to receiving the bulk of the profits, defendant: (1) provided false identification and counterfeit checks to his group leaders; (2) instructed the groups to go to various cities to cash the checks; (3) told the group leaders to cash the checks only on certain days and at particular types of stores, banks and pawn shops; (4) provided bond money when check-cashers were arrested; and (5) frequently contacted the leaders and other participants after they had arrived in a state to pass the fake checks. The record demonstrated that defendant played an active role in organizing and perpetuating the scam. U.S. v. Mijangos, 240 F.3d 601 (7th Cir. 2001).
7th Circuit holds that information in PSR supported supervisory increase. (431) Defendant’s PSR listed a number of factors reflecting defendant’s supervisory position, including (1) he alone financed the operation; (2) all of the precursor chemicals and equipment for manufacturing methcathinone were stored on defendant’s property; (3) each of the other three defendants at some point lived with defendant on his property; (4) each of the other three defendants performed services under defendant’s direction in furtherance of the conspiracy, including acquiring precursor chemicals and guns; (5) each of the other three defendants sold methcathinone that defendant manufactured; and (6) defendant directed and supervised these activities. Based on the information in the PSR, the Seventh Circuit affirmed a § 3B1.1 supervisory role increase. The district court found that defendant’s explanation of the events was less believable than that of the other defendants, and this credibility determination would not be disturbed on appeal. Moreover, other evidence presented to the court, such a defendant paying Catlett’s bail without ever having met him before, and the testimony of grand jury witnesses that defendant instructed them to purchase precursor chemicals, supported the increase. U.S. v. Lemmons, 230 F.3d 263 (7th Cir. 2000).
7th Circuit upholds leadership increase where seven employees were integral to conspiracy. (431) Defendant operated massage parlors that were fronts for his prostitution business. He challenged a four-level leadership increase under § 3B1.1(a), arguing that any conspiracy to launder money involved only him and his son. However, the evidence clearly showed that defendant led and organized at least seven employees. These people processed credit card transactions, kept the books, issued checks, accounted for shift receipts, delivered the receipts to defendant and his son, hired and fired masseuses, made schedules, held meetings, and set policies. All knew that defendant was laundering the proceeds of the prostitution business which ultimately furthered that business. The activities of these people were integral to the conspiracy. Thus, the Seventh Circuit held that the district court did not clearly err in applying a § 3B1.1(a) leadership enhancement. U.S. v. Baker, 227 F.3d 955 (7th Cir. 2000).
7th Circuit holds that leadership increase not plain error. (431) The government argued that during his sentencing hearing defendant forfeited his objection to a § 3B1.1(c) leadership increase. The Seventh Circuit agreed that defendant at least forfeited his argument. Waiver was also conceivable, but since the government did not argue waiver, the panel did not decide that issue. During sentencing, defense counsel stated that “under the law [defendant] had a role in the offense and he acknowledges that. That’s going to increase the level. That the law indicates that someone who has done the kind of things that [defendant] has admitted to doing will most assuredly run the risk of having additional points added to the base offense level. And he recognizes that.” Although defendant suggested that this statement went to the applicability of a more than minimal planning enhancement, the record did not support that view. Assuming generously that defendant merely forfeited the point, the panel reviewed the matter for plain error and found none. The factual record in the PSR indicated that defendant was the person who came up with the plan. He admitted at sentencing that “the primary responsibility for going out and securing properties rested on [him].” U.S. v. Haehle, 227 F.3d 857 (7th Cir. 2000).
7th Circuit says leadership increase supported by testimony of virtually every participant in conspiracy. (431) Defendant challenged the district court’s finding that he played a supervisory and leadership role in a drug conspiracy. The Seventh Circuit affirmed the increase, noting that it would have to reject the testimony of every other participant in the conspiracy in order to reject the court’s conclusion that defendant acted in a leadership and supervisory role. The consistent testimony was that defendant was directing the actions of others in the acquisition and distribution of drugs and in the collection of the proceeds. U.S. v. Payne, 226 F.3d 792 (7th Cir. 2000).
7th Circuit finds organizing role where defendant set time and location of deal and could negotiate price. (431) A confidential informant who had previously bought crack from defendant paged defendant. Defendant returned the call and instructed the informant to go to a certain address. The informant went there and was met by an unidentified woman, who acknowledged that defendant had alerted her that he would be arriving. The woman said she would sell two rocks of crack for $40, but informant replied that he always got a better deal from defendant. The woman replied that he could wait for defendant if he wanted a better deal. The informant purchased the crack. Despite defendant’s claim that he did not exercise any control over the woman, the Seventh Circuit affirmed a § 3B1.1(c) role in the offense increase. At the very least, defendant played a coordinating or organizing role that was sufficient under § 3B1.1(c). Defendant coordinated the transaction by setting the time and location of the deal. He also called the woman to let her know the informant would be arriving. Finally, when the informant balked at the price, the woman responded that he would have to wait for defendant if he wanted a better price. The court reasonably inferred that defendant, not the woman, had authority to negotiate the price. U.S. v. Matthews, 222 F.3d 305 (7th Cir. 2000).
7th Circuit holds finding that there were people “all over” was sufficient to show five or more. (431) Defendant Pink argued that the district judge should have made specific findings about which participants were under his supervision. Instead, the court, referring to “Pink’s Alley,” said “That alley was running full blast with people all over it and they were working for him, and however we get there, there’s ample evidence to say five.” The Seventh Circuit upheld the court’s observation. In addition, the court noted that Application Note 2 to § 3B1.1 also permits the three-level increase if the defendant “exercised management responsibility over the property, assets or activities of a criminal organization.” Defendant Pink managed “Pink’s Alley” and thus qualified in this way for the enhancement as well. U.S. v. Smith, 223 F.3d 554 (7th Cir. 2000).
7th Circuit finds defendants held leadership role in price-fixing conspiracy. (431) Defendants, corporate officers of ADM Co., conspired to fix global prices and allocate the sales volume of lysine, an amino acid added to animal feed to stimulate growth. The Seventh Circuit held that the district court clearly erred in refusing to apply a § 3B1.1 role in the offense enhancement. The district court mischaracterized the conspiracy as a union of equals, which it was only in part. Defendant Andreas used coercive power to force the foreign competitors to accept ADM’s leadership role in the cartel, demonstrating his control over the cartel and its participants. When the cartel had internal squabbles and disputes, Andreas was called in to resolve them. The fact that his control over his co-conspirators was not absolute, and that he had to negotiate, did not negate his leadership status. Defendant Wilson ran the cartel meetings and spoke for ADM. He appeared on countless tapes proposing ways to run the cartel and make it more efficient. Neither Wilson nor Andreas were “equally culpable” with the other conspirators, since it was ADM that suggested the scheme, planned it, and carried it out. U.S. v. Andreas, 216 F.3d 645 (7th Cir. 2000).
7th Circuit agrees that president had control over company salesmen. (431) Defendant and others engaged in a phony investment scheme through which they bilked nearly 30 investors out of more than $15 million. The Seventh Circuit agreed that defendant, the president of one the companies involved in the scheme, deserved a § 3B1.1(b) managerial increase. To qualify for the increase, the district court had to find that defendant had control over at least one participant in the criminal activity. Although the court did not find this fact explicitly, its discussion of defendant’s relationship to Russey and Oesterman indicated that it found the necessary supervision. Defendant was president of the company, and Russey and Oesterman were salesmen for the company. As such, defendant was their boss, not their equal. U.S. v. Polichemi, 201 F.3d 858 (7th Cir. 2000).
7th Circuit holds that lawyer’s organizer enhancement also justified by use of special skill. (431) Defendant served as the attorney for the leaders of a phony investment scheme that bilked nearly 30 investors out of more than $15 million. The district court applied a two-level aggravating role enhancement under § 3B1.1, noting that without defendant, one of the conspiracy’s leaders “wouldn’t be able to write a letter.” The Seventh Circuit found it unnecessary to decide whether defendant actually held a leadership role, since the two-level increase could also be upheld on the basis that defendant “used a special skill, in a manner that significantly facilitated the commission or concealment of the offense.” USSG § 3B1.3. The record was quite clear that defendant used his skills as a lawyer to facilitate the offense. U.S. v. Polichemi, 201 F.3d 858 (7th Cir. 2000).
7th Circuit agrees that doctor’s patients were participants in insurance fraud scheme. (431) Defendant, a medical doctor, involved as many as 130 patients in a complicated scheme to defraud insurance companies by charging for services he did not provide. He challenged a § 3B1.1(a) leadership increase, arguing that the court failed to make express findings as to which of his patients constituted members of the scheme. However, the district court adopted the statements in the PSR that defendant’s scheme involved at least five other participants: his receptionist, the Sansano family of three, and Leighton, a patient. Defendant instructed his receptionist to create false records and order patients to file false claims and allowed her to perform therapy without a license, which he billed to insurers. He taught Leighton how to obtain disability payments fraudulently and convinced her to create false records inflating her insurance claim. Defendant also instructed each of the Sansanos to create false medical records to inflate their insurance claims. Accordingly, the Seventh Circuit ruled that the patients were properly treated as participants in the scheme. U.S. v. Vivit, 214 F.3d 908 (7th Cir. 2000).
7th Circuit rules that defendant held managerial role in drug conspiracy. (431) Defendant argued that the district court erred in finding that he was a manager/supervisor under § 3B1.1(a). The Seventh Circuit ruled that the evidence clearly supported the court’s managerial finding. Hemphill’s testimony established that when he first began working for the conspiracy’s leader, he was accompanied by either defendant or Frazier on all runs. Phillips testified that the leader of the organization only dealt with defendant or Frazier. Torrence stated that when he was arrested he had a gun and 56 packets of crack that defendant had given him. Frazier testified that, at the time of his arrest, Torrence was working for defendant but that he also worked for others. He also testified that defendant gave him a gun with a silencer. Finally, Linnear’s testimony established defendant operated a crack house. U.S. v. Frazier, 213 F.3d 409 (7th Cir. 2000).
7th Circuit applies enhancement even though leadership role ended before guidelines’ effective date. (431) Defendant, a member of the El Rukn street gang, was involved in a drug conspiracy that straddled November 1, 1987, the effective date of the sentencing guidelines. He argued that he could not be given a leadership enhancement because his leadership role ended with his demotion from “General” to private before November 1, 1987. He cited U.S. v. Torres, 901 F.2d 205 (2d Cir. 1990), in which the Second Circuit held that the ex post facto clause forbids punishing defendants as “principals, administrators, organizers, or leaders” of a continuing criminal enterprise if their leadership role did not continue after the enactment of the statute creating the offense, even though the enterprise itself continued past that date. The Seventh Circuit held that the enhancement was proper under the straddle rule. The statute at issue in Torres created a new substantive offense that had as an element that defendant have had a leadership role. Thus, it punished Torres for engaging in conduct before the statute was passed. In the present case, defendant committed all the elements of the offense after the change in the guideline, and thus became responsible for the conduct that he engaged in before the change. U.S. v. Boyd, 208 F.3d 638 (7th Cir. 2000), vacated in part on other grounds, Boyd v. U.S., 531 U.S. 1135, 121 S.Ct. 1072 (2001).
7th Circuit holds that defendant’s wife was not equal partner in marijuana growing business. (431) Defendant and his wife owned a farm on which they raised hogs and grew marijuana. He challenged a § 3B1.1 enhancement for being the leader of his wife in the conspiracy. The Seventh Circuit rejected defendant’s claim that his wife was an equal partner in the marijuana operation. The wife was not a partner in the operation when it began in 1993, did not even see the plants until 1994, and did not start taking care of the plants until January 1998. Her duties consisted mainly of watering the plants for a cash wage, while defendant was responsible for the cloning, sales and distribution. Moreover, defendant retained about 85% of the proceeds from the sale of the marijuana. U.S. v. Roth, 201 F.3d 888 (7th Cir. 2000).
7th Circuit says defendant was organizer of drug conspiracy involving more than five participants. (431) There was extensive evidence of defendant’s role in a drug conspiracy, all of it tending to show that he was the organizer and leader. He proposed the scheme to Gonzalez in New York, stood to gain a disproportionate share of the drugs, procured a minivan for the trip, knew where to go and selectively released information regarding the details of the trip to the other participants. Defendant recruited Warwick in Tulsa and doled out the expense money, although he insisted that he meant to get reimbursed. In Tucson, he arranged the drug deal from his sources and directed his lackeys in the loading, unloading and testing of the drugs. The Seventh Circuit ruled that this evidence adequately supported the court’s finding that defendant was an organizer or leader. The operation also involved five or more participants, even though only four people were prosecuted. The question is the size of the criminal operation, not the size of the prosecution. Several people who participated in Arizona were criminally responsible, including the man whom defendant contacted to escort him to the safe house and the second man who brought the minivan back loaded with marijuana. U.S. v. Richards, 198 F.3d 1029 (7th Cir. 2000).
7th Circuit holds that election fraud scheme was extensive. (431) Defendant, a former U.S. Congressman, was convicted of bank fraud and federal election law violations, and obstruction of justice in connection with these crimes. The district court applied a § 3B1.1(a) enhancement for being the leader of criminal activity which involved five or more participants or was otherwise extensive. The court found that four persons besides defendant participated in his criminal activity. These participants were all campaign workers who benefited from defendant’s illegal campaign activities. The conspiracy lasted over five years, involved millions of dollars, involved sham ward organizations designed to launder money from unions, and required deceiving the Federal Election Commission, the IRS, and the general public. Thus, even if there were not five or more participants, the Seventh Circuit agreed that this scheme was extensive and justified the four-level enhancement. U.S. v. Reynolds, 189 F.3d 521 (7th Cir. 1999).
7th Circuit says leader need not control all participants. (431) Although defendant argued that he did not have sufficient control over all the members of the conspiracy to be a leader, the Seventh Circuit ruled that defendant clearly qualified for the § 3B1.1(a) enhancement. In addition to his concession that he had control over Trotter, defendant was one of the main drug suppliers to the conspiracy and fronted drugs to members of the conspiracy on more than one occasion. He directed members as to what drugs could be sold, traded, or bartered for things other than money, and resolved a dispute between two members of the conspiracy. Finally, defendant received a greater share of the profits, and reimbursed Trotter for his traveling expenses. The fact that defendant did not control all the members of the conspiracy was not significant. Section 3B1.1 does not require that a defendant knew of or exercised control over all of the participants. U.S. v. Hardamon, 188 F.3d 843 (7th Cir. 1999).
7th Circuit holds that policeman was leader in robbery. (431) Two teenagers and defendant, a five-year veteran of the Chicago police force, robbed a store of illegal fireworks and cash by pretending to conduct an official police seizure. The Seventh Circuit upheld a § 3B1.1(c) leadership enhancement since defendant made the decision to rob this particular store, ordered one of the teens into the store to determine the location of the fireworks, advised the store owner that he was under arrest, and directed his cohorts to remove the boxes of fireworks from the store. Moreover, defendant ordered the teens to load the fireworks into his truck, thereby giving him significant control over the stolen goods and augmenting his ability to dispose of them. Defendant also gave the owner a victim information notice and advised him that he would be contacted later about his court date. Defendant also was the only party armed during the robbery. Finally, defendant was ten years older than his two teenage friends, which further suggested that he was the leader of the group. U.S. v. Sierra, 188 F.3d 798 (7th Cir. 1999).
7th Circuit affirms manager enhancement based on control over accomplices. (431) The government argued that defendant was a manager or supervisor because (1) Sanders stated that he sold crack cocaine for defendant on a regular basis, usually operating out of defendant’s van; (2) five other conspirators all confirmed that Collins sold crack for defendant; (3) Pool and a confidential informant both stated that Graham also sold cocaine for defendant; (4) Green stated that he cooked crack for defendant in 1991 and began selling crack for him in 1992; (5) Wilson said that he sold crack for defendant in the summer of 1992; and (6) Pool said that Rollin sold cocaine for defendant. Given this extensive evidence of defendant’s control over his accomplices, the Seventh Circuit agreed that the manager/supervisor enhancement was proper. U.S. v. Joiner, 183 F.3d 635 (7th Cir. 1999).
7th Circuit rejects knowledge requirement for leadership enhancement. (431) Defendant participated in a bank fraud scheme. Two of his conspirators gave detailed statements to the FBI implicating defendant as the mastermind. Defendant argued in his brief that to apply § 3B1.1(a) leadership enhancement, a sentencing court must find that a defendant controlled at least four other participants. At oral argument, he claimed that § 3A1.1(a) contains a knowledge requirement: the enhancement only applies if the court finds that the defendant knew or could have reasonably foreseen that there were four other participants. The Seventh Circuit held that § 3B1.1 does not require that a defendant knew of or exercised control over all of the participants. Control is probative, but not decisive. Moreover, a defendant’s control over other participants can be indirect as well as direct. Thus, a leader cannot insulate himself from responsibility by delegating authority to only one or two deputies. It is enough that others be acting according to the organizer’s design. U.S. v. Kamoga, 177 F.3d 617 (7th Cir. 1999).
7th Circuit finds supervisor role where co-conspirator’s role changed from equal to underling. (431) Defendants partially owned and operated an aluminum smelting company. They entered into a scheme under which a co-conspirator’s company submitted false invoices, or invoices to cover personal work at defendants’ houses, to the smelting company. Defendants would write checks to cover these invoices, and defendants and the co-conspirator would split the proceeds. The Seventh Circuit agreed that defendants deserved a § 3C1.1(c) enhancement for supervising the co-conspirator at the other company, even though during the active period of the operation, the co-conspirator acted as a co-equal partner. However, the co-conspirator’s role changed from equal to underling once the cover-up began. At this point, defendants assumed a dominant role, telling the co-conspirator what to do, coaching him on what to say to the FBI, and then paying him to do it. Nothing in the guideline requires the court to limit the enhancement for supervision to one particular period during a length course of criminal conduct–even if that period lasted the longest. U.S. v. Mankarious, 151 F.3d 694 (7th Cir. 1998).
7th Circuit upholds managerial roles for defendants in “chop shop” conspiracy. (431) Defendants were involved in a large “chop shop” conspiracy involving several interlocking businesses from body shops to junkyards in at least four states. The Seventh Circuit affirmed that three of the defendants held managerial roles in the conspiracy. The first defendant was involved at several levels of the conspiracy, demonstrated a knowledge of how things were done, and had a substantial role in planning and organizing the conspiracy. He also took over the organization when his father was in prison. The second defendant placed specific orders for vehicles, and was an outlet for parts that he did not order. He also had a business that allowed him to use the vehicles stolen by other members of the conspiracy. He set thefts in motion, directed the activities of others, and played a large part in planning, arranging, and identifying vehicle thefts. The third defendant placed orders for stolen vehicles, instructed the thieves about what kind of vehicle to steal, and managed the disposition of stolen vehicle parts. The fact that he was only 22 years old did not prevent him from being a manager. U.S. v. Griffin, 148 F.3d 850 (7th Cir. 1998).
7th Circuit holds defendants were organizers, rather than managers, because no one gave them orders. (431) Defendants were convicted of involvement in a cocaine trafficking conspiracy. The district court found they were organizers or leaders of the conspiracy. Defendants argued that the factors the court relied upon described a manager’s role rather than an organizer’s role. The Seventh Circuit disagreed. The court distinguished between a manager and an organizer, noting that an organizer does not receive instructions from others while a manager does. No one outranked defendants in the conspiracy. They were partners. Together, they handled the daily operations of distribution as well as oversaw disputes between the other participants. This evidence by itself established that they were more than just managers. The fact that their supplier did not receive a similar enhancement was irrelevant. The fact that another defendant was treated differently is not a reason to disturb a sentence. U.S. v. McClinton, 135 F.3d 1178 (7th Cir. 1998).
7th Circuit rules defendant held managerial role in advance-fee loan scam. (431) Defendant and his partner were convicted of an advance-fee loan scam. The Seventh Circuit affirmed a managerial role enhancement based on defendant joining with his partner in supervising the faxers, mailers and check cashers who were the supporting cast in the scam. Defendant also made a victim of the fraud a tool of the fraud by having the victim obtain codes from his employer that enabled the conspirators to cash blank checks used in a money transfer system for the trucking industry. U.S. v. Stafford, 136 F.3d 1109 (7th Cir. 1998).
7th Circuit says findings and adoption of PSR adequately supported leadership enhancement. (431) Defendant and his brother robbed a bank. Defendant argued that the court gave no reason for a § 3B1.1 leadership enhancement. The Seventh Circuit held that the court adequately stated its reasons. Defendant’s PSR noted that defendant had gone to the bank days before the robbery to study it, that the brother had testified that the robbery was defendant’s idea, and that defendant had kept all but about $400 of the proceeds. When defendant challenged the brother’s credibility, the court directed the government to make him available for live testimony at the sentencing hearing. After hearing the brother, the court overruled defendant’s objection and said it was finding that he had a leadership role. The court also adopted the factual findings and guideline applications in the PSR. The reference to the findings and rationale in the PSR permitted the appellate court to evaluate the district court’s decision, and that was all that was required. U.S. v. Taylor, 135 F.3d 478 (7th Cir. 1998).
7th Circuit holds court’s adoption of PSR justified supervisory enhancement. (431) Defendant participated in a conspiracy that conducted an illegal gambling business, made extortionate extensions of credit, and collected a “street tax” from local businesses. Defendant argued that the district court erroneously found that he played a supervisory role in the illegal gambling operation. The Seventh Circuit affirmed the § §3B1.1 enhancement because defendant did not object to the PSR’s finding that he had a supervisory role in the operation of the gambling business. At the final sentencing hearing, defense counsel agreed that the PSR’s recitation of the facts of the offense to which defendant pled guilty was factually accurate. The judge then said he was making those findings of fact the basis for sentencing. That procedure was sufficient to justify a supervisory enhancement. The PSR stated in pertinent part that 10 defendants engaged in the activity, defendant was the third most culpable, he supervised the crew’s illegal gambling and loan operations and was aware of all aspects of the crew’s criminal activity. Defendant’s claim, raised for the first time on appeal, that there were fewer than five participants in the scheme, was contradicted by the facts in the PSR. U.S. v. Wing, 135 F.3d 467 (7th Cir. 1998).
7th Circuit finds defendant was supervisor in money laundering operation. (431) On two occasions, defendant laundered $75,000 for an undercover agent posing as a drug trafficker. An associate, who called himself defendant’s partner, helped with the transactions. Defendant and the associate then had several conversations with the agent over the next several months. In October, the associate accepted an additional $80,000 for laundering. The Seventh Circuit affirmed a § 3B1.1(c) supervisor enhancement based on defendant’s management of the associate. Although defendant claimed he never directed the associate, the plea agreement said that defendant converted cash into checks “acting on instructions from” defendant. Defendant also said things to the undercover agent like “I’m in full control” and he kept “full control of his deals.” U.S. v. Gwiazdzinski, 141 F.3d 784 (7th Cir. 1998).
7th Circuit upholds judge’s findings supporting managerial role. (431) Defendant argued that the judge’s findings were too general in nature to establish his managerial role in a drug conspiracy. The Seventh Circuit disagreed. The court expressly found that defendant exercised control over his co-conspirators. In addition, the judge adopted the PSR. In responding to the PSR, defendant did not object to the factual characterization of the offense. He only objected to the PSR’s legal conclusion regarding his managerial status. The district court’s finding of a managerial status was not clearly erroneous. Defendant was responsible for organizing and overseeing a drug delivery and had control over his co-conspirators who were in the Chicago area to ensure that the transaction was successful. In meeting with the agents, defendant negotiated the logistics of the delivery. U.S. v. Wilson, 134 F.3d 855 (7th Cir. 1998).
7th Circuit rules kickback scheme involved five participants. (431) Defendant, an employee of the U.S. Postal Service, hired contractors to perform work on post offices in exchange for kickbacks of money, vehicles, services and real estate. The Seventh Circuit upheld a § 3B1.1(a) leadership enhancement based on defendant’s control over a scheme involving five or more participants. Two contractors testified that defendant not only recruited them into the kickback scheme, but that he directed their actions in performing the repair jobs and filling out the fraudulent invoices. Defendant led at least two other contractors as participants in the scheme. They testified that defendant asked them to service his personal properties, and they did not collect any fees for this work. Moreover, even if these last two contractors were not part of the scheme, the kickback scheme was “otherwise extensive.” U.S. v. Emerson, 128 F.3d 557 (7th Cir. 1997).
7th Circuit upholds defendant’s leadership role in drug conspiracy. (431) Defendant was convicted of a drug conspiracy. The Seventh Circuit upheld a § 3B1.1 leadership enhancement based on testimony by conspirators that they worked for defendant and took orders from him. Other participants testified that they observed defendant give orders and directions to other members of the organization. Defendant directed conspirators with respect to prices and weights and quantities of cocaine to sell. Defendant even organized his girlfriend, getting her to purchase a car in her name, which he used in his cocaine business. U.S. v. Adams, 125 F.3d 586 (7th Cir. 1997).
7th Circuit affirms managerial role enhancement for defendant who employed 10 to 20 people to break down marijuana. (431) Defendant was convicted of a conspiracy to distribute marijuana. The Seventh Circuit affirmed a managerial role enhancement based on the district court’s finding that defendant had employed between 10 and 20 people to break down large quantities of marijuana into smaller units for sale. U.S. v. Lindsey, 123 F.3d 978 (7th Cir. 1997).
7th Circuit upholds reliance on hearsay to determine leadership role in smuggling conspiracy. (431) Defendant, an internationally recognized expert on rare birds, conspired with others to smuggle protected parrots and macaws into the United States. The Seventh Circuit upheld the district court’s reliance on hearsay to determine that defendant was the leader or organizer of the conspiracy. The district court was well aware that in sentencing procedures, it ought to carefully scrutinize hearsay that is particularly suspect and not corroborated. Although defendant characterized his role as merely a seller of birds and a helper in a co-conspirator’s operation, the district court’s determination was based on 8 days of witnesses at the sentencing hearing. It is the district court’s role to make credibility determinations. U.S. v. Silva, 122 F.3d 412 (7th Cir. 1997).
7th Circuit affirms role increase where defendant’s alter ego directed the fraudulent activity. (431) Defendant and his family fraudulently procured unemployment compensation checks for fictitious employees of the bar and restaurant he owned with his brother. The Seventh Circuit affirmed a § 3B1.1(a) enhancement since defendant implicitly conceded that a “Louis Valera” directed the fraudulent activity, and the district court properly concluded based on overwhelming evidence that defendant was Valera. Louis Valera was identified in the city records as the owner of the bar. Defendant’s fingerprints matched those taken prior to the issuance of the bar’s liquor license and held on file by the city as belonging to Louis Valera. The mail for the bar was ordered forwarded to a post office box and the change of address form was signed by Valera. At the time of his arrest, defendant had a key to the post office box. Since defendant’s arrest, the bar had not reopened and the mail to the post office box had not been claimed. Finally, an accountant for the bar identified defendant as the person she knew as Valera. U.S. v. Zaragoza, 117 F.3d 342 (7th Cir. 1997).
7th Circuit looks to overall conspiracy to determine number of participants. (431) Defendant was involved in a Chicago crime syndicate. He challenged a § 3B1.1(b) managerial enhancement on the ground that there were less than five participants in the debt collections underlying his RICO conspiracy conviction. The Seventh Circuit held that a court should determine the number of participants by examining the overall conspiracy rather than each predicate offense. In this case, the RICO conspiracy certainly involved at least five people. U.S. v. Zizzo, 120 F.3d 1338 (7th Cir. 1997).
7th Circuit affirms leadership enhancement for role in drug conspiracy. (431) Defendant was a wholesaler of cocaine and marijuana in the Chicago area. The Seventh Circuit found that defendant was a leader or organizer under § 3B1.1 of a drug conspiracy. Defendant was more than a mere middleman or distributor. One conspirator testified that she accompanied defendant on a daily basis to pick up money from drug sales and deliver narcotics, and that she frequently answered the phone for defendant when his drug suppliers or purchasers called him. Another conspirator also testified he frequently accompanied defendant in his “load” cars to deliver cocaine and pick up money from sales of narcotics. A third conspirator testified that at defendant’s direction, he obtained cocaine from a distributor that had previously been “fronted” to him by defendant. He also testified that he did errands for defendant, answered his phone, delivered messages to him, and fixed his car on occasion. Although defendant objected to the PSR’s recommendation of the § 3B1.1(a) reduction, he did not offer any evidence to contradict its findings. U.S. v. Magana, 118 F.3d 1173 (7th Cir. 1997).
7th Circuit affirms leadership enhancement in drug conspiracy. (431) Defendant and his stepbrother ran a family drug business. The Seventh Circuit affirmed a four-level enhancement for his leadership role in a conspiracy involving five or more people. Defendant acknowledged that three others sold drugs for him. There were two other people indicted along with him in the conspiracy. Although defendant claimed that they were merely customers, there was evidence independent of his proffer that the two were participants. A co-conspirator told the government that he had seen one of the men selling drugs at defendant’s residence. Both men pled guilty to conspiring with defendant to distribute crack cocaine. Defendant essentially admitted at his plea hearing that the two were involved in trafficking drugs. U.S. v. Sadiq, 116 F.3d 213 (7th Cir. 1997).
7th Circuit upholds reliance on hearsay to affirm leadership role in food stamp fraud. (431) Defendant, who operated two grocery stores, illegally bought food stamps for 67 percent of their face value and redeemed them at his local bank. The Seventh Circuit affirmed a leadership enhancement based on his control over the store employees involved in the scheme. An undercover agent testified that a store employee told him that defendant had instructed the employee as well as five co-employees to purchase food stamps for cash at a rate of 67 cents on the dollar, and that defendant used the cash from those transactions to fund future purchases. The Seventh Circuit affirmed the court’s reliance on the agent’s hearsay to apply the leadership enhancement. The sentencing court ruled that the agent’s hearsay statement was reliable to the extent it was corroborated by independent evidence, including a written account by the store employee. In addition, undercover agents exchanged food stamps for cash with six different store employees at two different locations, on four occasions. U.S. v. Barnes, 117 F.3d 328 (7th Cir. 1997).
7th Circuit agrees that defendant held managerial role in drug conspiracy. (431) The Seventh Circuit approved an organizer or managerial role enhancement because defendant directed the efforts of three co-conspirators, arranged for a drug transaction, directed and controlled another co-conspirator, and indirectly recruited, directed and controlled a fifth conspirator through his direction of the fourth conspirator. Defendant was more than a middleman. He exercised a great deal of management responsibility over the property and activities of the conspiracy. In his brief, defendant admitted to having some control over one conspirator who acted as a courier, and admitted to setting dates and times for co-conspirators to meet the supplier for pick-up. U.S. v. Vargas, 116 F.3d 195 (7th Cir. 1997).
7th Circuit finds defendant organized stolen car offense. (431) Defendant planned to visit his girlfriend in another state, but the trip was canceled for lack of a car. That evening, defendant and two friends saw a desirable car. They talked about taking the car but one friend refused to participate. The next evening defendant and the other friend returned to the house where they had seen the car, and stole the car from the owner when he returned home. Defendant and the first friend were apprehended later on a trip to visit defendant’s girlfriend. The Seventh Circuit affirmed a leadership enhancement because it was defendant’s idea to steal the car for his trip, he originally engaged both friends to help him, and he returned the second night to complete the robbery. Although one friend assisted in the robbery, he did not accompany defendant on the trip. On the trip, defendant was the sole driver of the car. Although the judge did not explicitly find that defendant controlled either of his friends, the overall focus under § 3B1.1 is relative responsibility within a criminal organization. No single factor is essential to determining whether to apply § 3B1.1. U.S. v. Billingsley, 115 F.3d 458 (7th Cir. 1997).
7th Circuit finds managerial role in drug conspiracy. (431) The 7th Circuit upheld the district court’s finding that defendant played a managerial role in a drug and money laundering conspiracy. Defendant was arrested while transporting marijuana by commercial airline and on two previous occasions he transported drugs and money by U-Haul truck. One conspirator testified that defendant directed her to transport marijuana from San Diego to Indianapolis on two occasions and to pick up wire transfers on several other occasions. An employee of an Indianapolis check cashing business stated that she had known defendant for more than a year and that he would come in with 2 or 3 people at a time and make wire transfers of $2-3,000 each. He provided the funds for the people and the documents showing where the money was going. Three others told a government investigator that they made wire transfers on defendant’s behalf. U.S. v. House, 110 F.3d 1281 (7th Cir. 1997).
7th Circuit affirms § 3B1.1(a) enhancement for “central figure” in drug and money laundering conspiracies. (431) Defendant pled guilty to a drug and money laundering conspiracy. The Seventh Circuit affirmed a § 3B1.1(a) enhancement based on defendant’s central role in the conspiracies. Defendant controlled who would receive the drugs, how much they would receive, and from whom they would receive them. Also, although the money involved in the laundering conspiracy was wired and received under a variety of names, defendant ultimately received the proceeds. Defendant was the common connection between virtually everyone named as a co-conspirator. U.S. v. House, 110 F.3d 1281 (7th Cir. 1997).
7th Circuit affirms § 3B1.1(a) enhancement for self-proclaimed chief of drug gang. (431) Defendant was the leader of a gang that distributed heroin. The Seventh Circuit affirmed a § 3B1.1(a) leadership enhancement given that defendant proclaimed himself “Chief” of the gang, others in the gang attributed the same rank to him, his organization had a monopoly on the white heroin trade in town, employees of defendant’s car wash were gang members and used the car wash to sell drugs, and that the membership of the gang ranged from a high of 30-40 to a low of 10-15. U.S. v. Taylor, 111 F.3d 56 (7th Cir. 1997).
7th Circuit upholds leadership role in drug conspiracy. (431) Defendant was convicted of conspiring to distribute crack cocaine. He argued that he was merely a seller in a buyer-seller relationship, and there was insufficient evidence of control or supervision to justify a § 3B1.1(a) enhancement. The Seventh Circuit found that defendant had a leadership role with respect to at least one conspirator. This conspirator was defendant’s “right-hand man,” and made statements indicating that defendant was responsible for obtaining the drugs this conspirator sold. In addition, the PSR said defendant had 5-10 juveniles selling for him. Defendant offered no more than a bare denial of this aspect of the PSR, and therefore the court was entitled to sentence based on this information. The three named juveniles in addition to the conspirator satisfied the number required by § 3B1.1(a). U.S. v. Hall, 109 F.3d 1227 (7th Cir. 1997).
7th Circuit finds defendant was ringleader of tax evasion scheme. (431) Defendant, a CPA, filed numerous false tax returns, each claiming a refund. He challenged a § 3B1.1(a) leadership enhancement, arguing that there was no criminal enterprise and that he was a sole practitioner committing separate individual criminal acts. The Seventh Circuit held that defendant was the leader of a tax evasion scheme. Defendant admitted facts in his plea agreement that showed he led others in the overall scheme. Defendant’s wife helped him on several occasions to convert the refunds checks and was the filer of at least one false return. His wife and another participant helped defendant create 61 false individual tax returns, and two other co-defendants cooperated in the preparation of their own fraudulent returns. Defendant was the ringleader. He was a CPA who knew how to prepare the returns and he directed the activities of others. U.S. v. Madoch, 108 F.3d 761 (7th Cir. 1997).
7th Circuit says employees who got bonuses for helping to falsify records were participants. (431) Defendant, with the assistance of others, engaged in a fraudulent scheme to obtain lines of credit from a bank. He challenged the district court’s finding that the criminal activity involved five or more participants under § 3B1.1(a). He conceded that he and two employees participated in the bank fraud scheme. The Seventh Circuit found that at least three more employees were participants in the scheme, because they were all actively involved in generating false contracts and reports to be submitted to the bank and helped to maintain a special record‑keeping system that made the entire fraudulent scheme possible. Moreover, two of these employees were rewarded with a cash bonus of $2,000 because of the extra work involved in preparing the fraudulent documents. U.S. v. Gerstein, 104 F.3d 973 (7th Cir. 1997).
7th Circuit rules that employee was participant in defendant’s counterfeit artwork scheme. (431) Defendant was convicted of selling counterfeit artwork. The Seventh Circuit affirmed a § 3B1.1(a) increase for leading an otherwise extensive criminal activity, agreeing that at least one of defendant’s employees was a participant. This employee worked for defendant for 12 years and rose to the position of vice‑president of operations. It was this employee’s responsibility to pacify customers who called to complain about the authenticity of works they had purchased from defendant. This employee admitted at the resentencing hearing to facilitating sales even after he realized that the works were not authentic. U.S. v. Austin, 103 F.3d 606 (7th Cir. 1997).
7th Circuit agrees that inmate held managerial role in scheme to smuggle drugs into prison. (431) While incarcerated, defendant and two other inmates agreed to smuggle methamphetamine into their prison. To accomplish this plan, defendant enlisted the aid of his girlfriend on the outside. One of the inmates located a seller on the outside who mailed drug‑filled balloons to the girlfriend. The girlfriend brought the balloons to the prison, and defendant swallowed them for later retrieval. The Seventh Circuit affirmed a § 3B1.1(b) enhancement, agreeing that defendant held a managerial role and that the scheme involved five participants. Although defendant may have had an equal role with the other inmates, he recruited and controlled his girlfriend. The scheme involved five participants: the three inmates, the girlfriend, and the seller. Although the seller may not have been a co‑conspirator, a party need not be a co‑ conspirator to qualify as a criminal participant. The seller qualified as a criminal participant because he provided knowing aid to the conspiracy. The seller had once been incarcerated with the inmates and knew them personally. The seller did more than deliver the drugs to the girlfriend; he packed them into 14 ingestible balloons to accommodate the smuggling. U.S. v. Hall, 101 F.3d 1174 (7th Cir. 1996).
7th Circuit affirms managerial enhancement based on adoption of PSR’s findings. (431) The PSR concluded that defendant was the most culpable of 10 co-defendants since he had obtained all of the cocaine and redistributed it to the other nine defendants. Defendant argued that he was a mere distributor and nothing else. The Seventh Circuit affirmed a leadership enhancement because the evidence showed that defendant controlled couriers who delivered the cocaine to his buyers. Buyers would page defendant and someone other than defendant would deliver the cocaine for defendant. The court’s findings satisfied Rule 32. Rule 32 can be satisfied in certain instances by making reference to the PSR. This is especially so where the defendant has merely objected to the report, as here, without offering evidence of any inaccuracy in that report. When the court overruled defendant’s objection, it did so in a context that showed that it was adopting as its own the factual findings in the PSR. U.S. v. McKinney, 98 F.3d 974 (7th Cir. 1996).
7th Circuit affirms leadership enhancement based on taped conversations and co‑conspirator’s statement. (431) Defendant was convicted of conspiring to possess with intent to distribute more than five kilograms of cocaine. The Seventh Circuit affirmed a leadership enhancement based on taped conversations with a conspirator and another conspirator’s statement that defendant was the “leader of everybody.” U.S. v. Hightower, 96 F.3d 211 (7th Cir. 1996).
7th Circuit upholds role increase based on stipulated relevant conduct in plea agreement. (431) Defendant pled guilty to one count of attempting to possess with intent to distribute 72 kilograms of cocaine. He argued that in imposing a § 3B1.1 enhancement the district court erroneously considered conduct beyond what was relevant to the offense of conviction. The Seventh Circuit held that the district court properly relied on conduct that defendant stipulated to in his plea agreement. The relevant conduct defendant admitted in the plea agreement indicated that he exercised direct influence over at least two other participants. He exercised tight control over the drug couriers, directing them where and when to go, arranging for them to receive the cars they would drive, instructing them how to contact the person or persons who loaded the drugs into the secret compartments, and instructing them on the route to take. He also assisted them in obtaining false driver’s licenses. U.S. v. Flores‑Sandoval, 94 F.3d 346 (7th Cir. 1996).
7th Circuit finds member of “board of directors” of drug ring’ was leader despite lack of direct supervision. (431) Defendant disputed a leadership enhancement under § 3B1.1(a) because he was a latecomer to the drug organization and did not supervise at least five members of the peripheral group of conspirators that consisted of workers, runners, crack cookers and security guards. The Seventh Circuit held that defendant was a leader because he was one of seven members of the “board of directors” that managed the drug ring. The commitment of this board to majority vote gave each member, including defendant, a position of authority tantamount to leadership. Also, members split the profits of the conspiracy equally among themselves. The fact that fewer than five members of the peripheral group actually reported to defendant was immaterial. U.S. v. Evans, 92 F.3d 540 (7th Cir. 1996).
7th Circuit rejects minor role where defendant was only charged with drugs he reasonably knew about. (431) Defendant argued that he played a minor role in a large drug conspiracy. The Seventh Circuit held that defendant was not entitled to a minor role reduction since he was only held accountable for the specific drugs he possessed at his arrest and the drugs recovered from an apartment over which he had control. Defendant was not held accountable for the full scope of the operation, which was estimated to involve between 700 and 1000 grams of heroin and between 15 and 50 kilograms of cocaine. U.S. v. Windom, 82 F.3d 742 (7th Cir. 1996), vacated in part on other grounds on rehearing by U.S. v. Windom, 103 F.3d 523 (7th Cir. 1996).
7th Circuit finds mail fraud scheme otherwise extensive. (431) Defendant purchased a “bank” licensed by the government of Montserrat. When the license was revoked for failure to maintain $300,000 minimum capital requirements, defendant purchased another corporation in Grenada. He advertised with brokers across the country offering the opportunity to earn high commissions through the sale of international and domestic CDs. Defendant spent most the money people invested on himself. The Seventh Circuit held that the scheme was “otherwise extensive” for purposes of a leadership enhancement under § 3B1.1(a). Defendant was the founder, promoter and CEO of the scheme. To carry it out, he enlisted the unwitting help of a nationwide network of more than 60 brokers who sold $16 million worth of certificates. He bilked over 400 investors. There were at least two other criminally responsible participants. U.S. v. Randy, 81 F.3d 65 (7th Cir. 1996).
7th Circuit upholds supervisor role where money laundering facilitated drug conspiracy. (431) Defendant pled guilty to a drug conspiracy. Although he did not hold a supervisory role in the drug trafficking, he supervised family members who were involved in laundering his proceeds from the drug conspiracy. The Seventh Circuit affirmed a § 3B1.1(c) enhancement based on defendant’s supervisorial role in the money laundering activities, because the money laundering was in furtherance of the drug conspiracy. Defendant admitted in his plea agreement that his money laundering activities concealed the proceeds of his narcotics trafficking. U.S. v. Lewis, 79 F.3d 688 (7th Cir. 1996).
7th Circuit agrees that defendant organized worker’s compensation fraud. (431) Defendant injured his back at home one weekend. The following day, he and a co‑worker faked an accident so that defendant could make a worker’s compensation claim. Defendant’s wife joined her husband in filling out the forms, which falsely claimed that defendant hurt his back at work. The Seventh Circuit affirmed a § 3B1.1 enhancement, agreeing that defendant organized the scheme, directed his co‑worker to lie to the insurance adjuster, and told his wife to complete the fraudulent worker’s compensation claim forms. The court could reasonably infer defendant’s control over his wife and co‑worker. The wife filled out the claim form at his request, and she testified at trial that defendant had physically abused her in the past and that she was afraid of him. Defendant recruited his co‑worker to assist in the scheme, and he told the co‑worker what to say. U.S. v. Bush, 79 F.3d 64 (7th Cir. 1996).
7th Circuit agrees that defendant was organizer caught in reverse sting operation. (431) Undercover officers, identifying themselves as drug suppliers, contacted defendant and offered to sell him drugs. A third party contacted by defendant eventually negotiated the purchase of a half kilogram of cocaine. Defendant contended that he was just the middleman and not an organizer in the offense. The Seventh Circuit disagreed, finding that defendant directed the associate as to what to do and say, and ultimately supplied the $11,000 in cash to buy the cocaine. The associate became involved in the transaction solely at defendant’s behest in exchange for a break on his rent and for the express purpose of making it seem as if defendant were a middleman. Defendant’s daughter also participated sufficiently to be considered a participant. She was present at her father’s meetings with the agents, acting as a “lookout,” was present when her father instructed the associate to negotiate the cocaine purchase, was present when the associate displayed the $11,000 to the agent, and even opened the trunk at her father’s direction in order to facilitate transfer of the cocaine. U.S. v. Granado, 72 F.3d 1287 (7th Cir. 1995).
7th Circuit finds union president held leadership role in diversion of union funds. (431) Defendant, the former president of a postal workers union, arranged with a finance company to set up a loan program for postal employees. The finance company used union office space and administrative personnel to operate the loan program. In return, the finance company kickbacked money to defendant for each loan. Defendant also sent notice that each non-union loan applicant was required to pay a $12 associate membership fee. Defendant personally received $120,000 in kickbacks from the finance company, and over $84,000 in associate membership fees. The Seventh Circuit agreed that defendant held a leadership role in the fraud scheme. Defendant solicited and obtained the payments from the finance company, directed and controlled the assessment and collection of associate membership fees, destroyed union records to conceal his fraud, and had the union illegally loan him money. Although the finance company president originated the concept of the loan program, defendant created the associate member and kickback schemes. There were more than five participants in the scheme. In addition to the three principals, at least eight union employees helped collect the associate membership fees as unknowing outsiders. U.S. v. Briscoe, 65 F.3d 576 (7th Cir. 1995).
7th Circuit approves § 3B1.1(c) enhancement for defendant who acted as manager for only part of conspiracy. (431) The district court imposed a § 3B1.1(c) enhancement based on evidence that defendant directed one co-conspirator on a trip to transport marijuana, and controlled the conspiracy’s money. Defendant argued that another conspirator was the sole supervisor in the conspiracy, pointing out that defendant was present only during the latter part of the conspiracy. The Seventh Circuit found that the amount of time defendant occupied the position of organizer or manager did not alter the fact that he held that position. Defendant’s lack of participation in the conspiracy’s 12 transactions before March 1993 was not relevant, given his managerial position from March 1993 to November 1993. U.S. v. Salinas, 62 F.3d 855 (7th Cir. 1995).
7th Circuit upholds managerial enhancement for “key player” in heroin smuggling operation. (431) The Seventh Circuit upheld a § 3B1.1(c) enhancement for a “key player” in a heroin trafficking operation that smuggled large amounts of heroin from Nigeria to Chicago. Defendant directed one courier’s activities when the courier arrived in the U.S. carrying more than 1200 grams of heroin. In addition, defendant’s involvement in the operation of the conspiracy was extensive. He recruited another courier and traveled to Nigeria with him. U.S. v. Akinrinade, 61 F.3d 1279 (7th Cir. 1995).
7th Circuit agrees that offense had five participants. (431) Defendant did not challenge the court’s characterization of him as an organizer or leader of a drug organization, but argued that the court incorrectly found five people participated in the conspiracy. He contended that one person counted by the court as a participant was merely “tagging along” with a conspirator on a drug deal. The Seventh Circuit affirmed the § 3B1.1(a) enhancement based on five participants. The fifth man assisted the conspirators in locating one conspirator to cook some cocaine, and handed cocaine to an informant. Therefore, the court did not err in calling this man a participant. U.S. v. Saulter, 60 F.3d 270 (7th Cir. 1995).
7th Circuit agrees that defendant held leadership role in extortion scheme. (431) Defendants and others conspired to obtain some cocaine. However, one of the conspirators lost the $12,500 purchase money. Defendant and the others were charged with various extortion offenses as a result of their attempts to obtain the money from the conspirator who lost the money. The Seventh Circuit affirmed a § 3B1.1(c) enhancement, agreeing that defendant coordinated the extortion scheme and exercised control over two of his co-conspirators. Defendant set the deadline for the return of the money, told the victims that they would “have to do what they have to do” if the deadline were not met, approved a trip to Mississippi to try to obtain the cash, ordered another conspirator to accompany the group on the trip, stayed in constant phone contact with the group, and ordered one conspirator to kill one of the victims. Moreover, defendant coordinated the attempt to extort money from one victim’s mother. U.S. v. Johnson-Dix, 54 F.3d 1295 (7th Cir. 1995).
7th Circuit upholds managerial role in marijuana distribution conspiracy. (431) The district court found that defendant was a manager or supervisor in a marijuana distribution conspiracy. The Seventh Circuit affirmed based on evidence that defendant was one of the key negotiators in a sting operation, fronted marijuana to other conspirators, directed two other conspirators to deliver marijuana, and organized the unloading of marijuana for storage at a warehouse. U.S. v. Adames, 56 F.3d 737 (7th Cir. 1995).
7th Circuit rules defendant was leader of stolen check cashing operation. (431) The Seventh Circuit ruled that defendant held a leadership role in a stolen check cashing operation based on evidence that he recruited at least two individuals to assist him in cashing checks. He directed their activities and made the decisions. U.S. v. Woody, 55 F.3d 1257 (7th Cir. 1995).
7th Circuit upholds leadership enhancement despite claim that defendant had anonymous superior. (431) Defendant, the director of personnel for the sheriff’s office, manipulated the recruiting process for deputy sheriffs and corrections officers. He handed out stamped application forms at the time they were not available to the general public, made sure that certain applicants were given passing scores on the written exam, and had fictitious GED certificates placed in the files of other applicants. The Seventh Circuit agreed that defendant played a leadership role in the scheme, even though he claimed to be acting at the behest of an anonymous high level official. Defendant directed the scheme, both designating the privileged applicants and informing his subordinates of the steps to be taken to ensure hiring. His position of authority enabled to him to accomplish this task. U.S. v. Hogan, 54 F.3d 336 (7th Cir. 1995).
7th Circuit concludes that defendant was organizer of otherwise extensive “bust-out” scheme. (431) Defendant and others were involved in a “bust-out” scheme to defraud their company’s trade creditors. The scheme involved ordering on credit goods worth more than $3.1 million, selling the goods for less than cost, diverting the proceeds to bank accounts held by family members, and transferring the money from the U.S. to Jordan. The Seventh Circuit held that defendant was an organizer of an otherwise extensive criminal activity under § 3B1.1(a). Three participants and a large number of outsiders were involved during the offense and their services made the scheme work. Defendant had greater responsibility for the fraudulent scheme than the others. U.S. v. Mohammad, 53 F.3d 1426 (7th Cir. 1995).
7th Circuit finds defendant’s wife was criminally responsible even though not convicted. (431) Defendant committed bankruptcy fraud by failing to disclose assets to the bankruptcy trustee, failing to disclose the receipt of proceeds from the sale of assets, and other misconduct. The district court enhanced his sentence under § 3B1.1(c) based on his aggravating role in recruiting his wife into the scheme and directing her efforts to conceal assets from the trustee. The Seventh Circuit affirmed, holding that defendant’s wife was a “criminally responsible” individual even though she was not convicted of bankruptcy fraud. The wife knowingly signed a document falsely stating that an asset was a family heirloom. She also knowingly accepted checks from the sale of hidden assets and deposited the proceeds into various bank accounts. Defendant directed her activities in connection with his fraudulent scheme. U.S. v. Michalek, 54 F.3d 325 (7th Cir. 1995).
7th Circuit holds that defendant played managerial role in check cashing scheme. (431) Defendant argued that he was an average participant in a stolen check cashing scheme because he did little more than make introductions, cash checks, and share in a small portion of the total proceeds of the scheme. The Seventh Circuit upheld a managerial role enhancement since defendant recruited accomplices and had a decision-making position in the operation. Even if defendant did not control the others, he did orchestrate their activities. A second defendant also played a managerial role in the scheme. This defendant was in charge of the leader’s criminal activities in Chicago while the leader was in Georgia. He gave instructions to an associate, and held one of the two checks the leader had left behind until he was confident that the associate had followed his instructions with respect to the first check. He then sent the money received to the leader in Georgia. This defendant also recruited his girlfriend and directed her activities. U.S. v. Dillard, 43 F.3d 299 (7th Cir. 1994)..
7th Circuit says defendant who obtained drugs and used house to sell them was leader. (431) Defendant and others sold drugs from his house. The Seventh Circuit agreed that defendant held a leadership role based on the fact that the drug sales occurred from defendant’s residence, he was responsible for obtaining the drugs from the source, and he directed some of the sales. Even if defendant and another co-conspirator were equally culpable, a leadership role is not limited to one person per organization. U.S. v. Billops, 43 F.3d 281 (7th Cir. 1994).
7th Circuit relies on ATF agent’s testimony to uphold managerial enhancement. (431) The district court imposed a three level managerial enhancement based on an ATF agent’s statement that defendant had supervised seven individuals in a drug conspiracy. Defendant denied the allegations and argued that there was no corroborating evidence to support the enhancement. The 7th Circuit approved the enhancement. The agent’s statement was supported by the totality of the evidence presented at the sentencing hearing and at the prior trial of defendant’s co-conspirators. The testimony was replete with references to defendant’s role in supplying, directing and paying for the drug transactions. Defendant made no attempt to rebut or otherwise challenge the reliability of the evidence presented during the prior trial. U.S. v. Linnear, 40 F.3d 215 (7th Cir. 1994).
7th Circuit relies on number of participants in entire RICO conspiracy rather than in predicate acts. (431) Defendant received a managerial role enhancement under § 3B1.1(b) for his role in a RICO conspiracy. He argued that the predicate act for which he received the enhancement (collection of an illegal debt by extortionate means) did not involve five participants. The 7th Circuit upheld the enhancement since at least five individuals were involved in the overall conspiracy. Section 3B1.1(b) applies if the criminal activity involved five or more people. The phrase is broad enough to include the entire racketeering conspiracy rather than the particular predicate acts alone. U.S. v. Morgano, 39 F.3d 1358 (7th Cir. 1994).
7th Circuit rules defendant held leadership role in cocaine distribution scheme. (431) The 7th Circuit agreed that defendant held a leadership role in a cocaine distribution scheme. Defendant traveled to Chicago, bought quantities of cocaine, divided it up, and parceled it out to his distributors. He had five people distributing cocaine for him. Defendant’s father assisted him in laundering money. Defendant directed the movements of distributors in meeting him and delivering cocaine, and wore a pager so that his distributors could easily contact him. U.S. v. Ferguson, 35 F.3d 327 (7th Cir. 1994).
7th Circuit approves managerial enhancement for recruiting accomplices and orchestrating relocation of drug lab. (431) The 7th Circuit held that a § 3B1.1(b) managerial enhancement was not plain error. The methamphetamine conspiracy unquestionably involved five or more persons since the indictment named 10 individuals. Defendant recruited a co-conspirator, orchestrated the relocation of the laboratory from Illinois to Arizona, and acted as an enforcer for the conspiracy. U.S. v. Zarnes, 33 F.3d 1454 (7th Cir. 1994).
7th Circuit holds organizer enhancement was not improperly based on judge’s mere “hunch.” (431) Defendant and an accomplice conspired to fraudulently obtain federal funds for a fictitious corporation. She argued that the sentencing judge erred by relying upon his own “hunch” that defendant was the organizer and leader. The 7th Circuit upheld the § 3B1.1(c) enhancement, since it was based on the judge’s reasonable inferences drawn from defendant’s actions. Defendant originated the fraud scheme, recruited the accomplice, established a post office box for the corporation, instructed her co-defendant to open a fraudulent business checking account, deposited the fraudulently received checks and wrote most of the checks from the account. U.S. v. Anaya, 32 F.3d 308 (7th Cir. 1994).
7th Circuit agrees that credit fraud scheme was otherwise extensive. (431) Defendants were involved in a complicated scheme that permitted telemarketers, through the use of intermediaries, to gain access to credit card funds. The 7th Circuit affirmed a § 3B1.1(a) enhancement, agreeing that the scheme was “otherwise extensive.” Defendants brought together several telemarketers who solicited sales from hundreds of consumers. The telemarketers charged these sales over the phone, and received credit for these charges from unwitting banks, using the services of intermediaries. One defendant recruited the scheme’s central figure and instructed him about third party processing and how to locate merchant accounts. The second defendant approved new merchant recruits whose real or purported businesses appeared to generate the kind of charges that made it more difficult for banks to detect the third-party charges. U.S. v. Brown, 31 F.3d 484 (7th Cir. 1994).
7th Circuit upholds leadership enhancement for defendant who exercised “some” control over others. (431) The 7th Circuit agreed that defendant was the organizer or leader of a conspiracy to import 500 kilograms of cocaine into the United States. Defendant played a major role in organizing the receipt and later distribution of the 500 kilogram drug shipment and was entrusted with large amounts of cash. One conspirator reported to defendant when the truck containing the 500 kilograms was stopped. Defendant was not required to directly control others so long as he exercised some control over them. U.S. v. Nava-Salazar, 30 F.3d 788 (7th Cir. 1994).
7th Circuit relies on relevant conduct to find more than five participants in offense. (431) Defendant was convicted of conspiring to launder money in connection with her prostitution business. She received a four point adjustment under § 3B1.1(a) for her leadership role in a criminal activity having five or more participants. Defendant conceded that there were five or more participants in the escort service, counting the escorts, but argued that there were fewer than five participants in the management aspects of the activity. The 7th Circuit found that it was proper to consider the escorts involved in the underlying criminal activity. Under 3B1.1(a), as amended November 1, 1990, the determination of a defendant’s role in the offense is to be made on the basis of all relevant conduct within the scope of § 1B1.3. U.S. v. Montague, 29 F.3d 317 (7th Cir. 1994).
7th Circuit agrees that defendant was leader of drug conspiracy. (431) The 7th Circuit upheld a two level enhancement under § 3 B1.1(b), agreeing that defendant led a drug conspiracy. The Florida supplier testified that defendant organized the transactions, both for himself and for others, arranged for the couriers to transport the cocaine, and usually had the shipments of cocaine delivered to him. Defendant also provided a co-conspirator with legal help when he was arrested. U.S. v. Donovan, 24 F.3d 908 (7th Cir. 1994).
7th Circuit agrees that state trooper was leader or organizer of armed robbery ring. (431) Defendant, an Indiana state trooper, helped plan four armed robberies. The 7th Circuit upheld an organizer or leader enhancement under § 3B1.1(a) based on evidence that defendant (a) first proposed the robbery spree, (b) agreed to allow an associate to recruit additional members of the conspiracy since defendant “didn’t know people,” (c) provided the group with weapons, information, a police scanner and transportation, and (d) received money from each hold-up. Defendant received a smaller share of the proceeds only because he was not physically present during the robberies. U.S. v. Parker, 25 F.3d 442 (7th Cir. 1994).
7th Circuit holds that defendants were managers of fraudulent minority-owned corporations. (431) Defendants were involved in a company that obtained a Postal Service contract by misrepresenting that it was a minority-owned business. The 7th Circuit upheld managerial enhancements under § 3B1.1(b). One defendant did all the legal work and handled correspondence relating to the fraudulent proposal. More incriminating was his recruitment of one of the company’s figurehead presidents. This reflected a level of responsibility consistent with a supervisory or managerial role. The fact that the second defendant was a minority shareholder and vice-president of one corporation did not undermine his managerial role in the scheme. Since the president was merely a figurehead, the second defendant was not under his direction. The second defendant worked on the contract and won the subsequent subcontract and appointed the corporation’s directors and officers. U.S. v. Loscalzo, 18 F.3d 374 7th Cir. 994).
7th Circuit agrees that defendant was organizer of insurance fraud scheme. (431) Defendant was involved in a scheme in which he and his co-defendants staged automobile accidents and other incidents and then collected on fraudulent insurance claims. The 7th Circuit upheld a four level enhancement under § 3B1.1(a) based on defendant’s role as organizer of the scheme. Defendant was involved in 48 of the 60 fraudulent claims made. He recruited other participants, supplied the bulk of the documentation in support of the claims, arranged and visited many of the staged accidents, directed fellow participants about what they should say about the accidents, supplied cars required for the accidents, supplied money to other participants, hired attorneys to handle certain fraudulent claims and distributed insurance proceeds. Moreover, he received a share of the proceeds from each of the fraudulent claims. U.S. v. Colello, 16 F.3d 194 (7th Cir. 1994).
7th Circuit upholds enhancement for recruiting others, renting store and financing equipment. (431) Defendant pled guilty to conspiracy to counterfeit over $600,000 in U.S. currency. He challenged a two level enhancement under section 3C1.1(c) based on his organizer role in the offense on the grounds that his co-conspirators, not he, possessed the requisite printing skills and printed the counterfeit bills. The 7th Circuit upheld the enhancement. The core concern of section 3B1.1 is relative culpability. Defendant recruited his co-conspirators, rented the store, and financed the equipment used to print the bills. Given these facts, the court could categorize defendant as having organized the conspiracy. U.S. v. Ramacci, 15 F.3d 75 (7th Cir. 1994)
7th Circuit finds defendant managed others, received more money, and was in constant communication. (431) The 7th Circuit found three factors supported defendant’s supervisory or managerial role enhancement. First, one co-conspirator was clearly defendant’s inferior and did his bidding. Although the co-conspirator initiated contact with the undercover agent, it was defendant who finalized the terms of the deal. Second, defendant had a greater material involvement in the deals. Finally, it was defendant who introduced another co-conspirator to the agent as his son, thus setting the second deal in motion. He also remained in “constant communication” with his two co-conspirators, likely coordinating the second deal behind the scenes. U.S. v. Cotts, 14 F.3d 300 (7th Cir. 1994).
7th Circuit upholds organizer enhancement where defendant failed to challenge factual assertions in PSR. (431) Defendant challenged the district court’s finding that she was an organizer or leader of criminal activity because it was based on unsworn statements in her presentence report. The 7th Circuit found that the district court properly relied on unchallenged factual propositions in the presentence report. The absence of sworn testimony from which the factual material was derived did not matter; defendant was stuck with factual statements that she did not contest. The fact that her co-defendant may also have been a leader did not matter. A defendant need not be the creator of a criminal scheme or control all aspects of it in order to be an organizer or leader. U.S. v. Ivory, 11 F.3d 1411 (7th Cir. 1993).
7th Circuit finds sufficient control over four others to justify role enhancement. (431) Defendant argued that the district court never made a finding that he had actual control over four others in his conspiracy to justify a §3B1.1(a) enhancement. The Seventh Circuit upheld the enhancement. Although the district court did not make a specific finding that defendant controlled four others, the record supported such a finding. Defendant convinced two conspirators to put up $50,000 each to buy five kilograms of cocaine. On the day of the buy, defendant fitted a third conspirator with an electronic listening device so that the conspirator could monitor defendant’s conversation and provide protection. By enlisting the help of one conspirator, defendant incidentally recruited the fourth conspirator who conducted counter-surveillance during the deal, presumably at the behest of the first conspirator. The fourth conspirator’s actions were sufficiently directed by defendant’s planning and organization. U.S. v. Carson, 9 F.3d 576 (7th Cir. 1993), abrogation on other grounds recognized by U.S. v. Monroe, 73 F.3d 129 (7th Cir. 1995).
7th Circuit holds that uncharged persons were participants in defendant’s criminal activity. (431) Defendant falsified his corporation’s financial documents in order to increase the corporation’s ability to borrow money from a bank. The 7th Circuit affirmed that the criminal activity involved five or more participants under section 3B1.1(a), even though only three individuals were charged with criminal offenses. Note 1 provides that a participant is a person who is criminally responsible for the commission of the offense but need not have been convicted. Three company employees who were not charged testified about their involvement in creating fictitious documents at defendant’s direction. Thus, it was clear that more than five participants were involved in the fraud. U.S. v. Nelson, 5 F.3d 254 (7th Cir. 1993).
7th Circuit upholds leadership enhancement for “linchpin” of bookmaking operation. (431) The 7th Circuit upheld a four-level leadership enhancement under section 3B1.1(a) based on defendant’s leadership role in his illegal bookmaking operation. Undisputed assertions in the presentence report showed that defendant supervised six workers who accepted wagers and layoffs over the telephone and entered this date into the exchange’s computer. He arranged with six bookmakers to share profits and losses and with still other bookmakers to accept their layoffs. The district judge concluded that defendant was the “linchpin” of the bookmaking operation. U.S. v. Hammes, 3 F.3d 1081 (7th Cir. 1993).
7th Circuit affirms leadership adjustment. (431) The district court enhanced defendant’s sentence based on his leadership role in criminal activity. Though defendant claimed that the evidence failed to support the conclusion that he supervised five or more people, the 7th Circuit affirmed. Based on all the evidence, the district court had found “no doubt in my mind” that defendant was “the moving force” behind the activity and “the primary individual around whom the others’ activities revolved.” U.S. v. Emenogha, 1 F.3d 473 (7th Cir. 1993).
7th Circuit upholds managerial enhancement for defendant who supervised unloading of marijuana. (431) The 7th Circuit upheld a three level enhancement under section 3B1.1(b) based on defendant’s managerial role of criminal activity involving five or more participants. There were clearly more than five participants — the indictment itself named 12 defendants. Defendant supervised three conspirators in the unloading of marijuana shipments from Florida and Indiana. There is no requirement in section 3B1.1(b) that a defendant control the activities of all the participants in the criminal activity. U.S. v. Johnson, 997 F.2d 248 (7th Cir. 1993).
7th Circuit upholds managerial role of defendant who controlled couriers. (431) The 7th Circuit affirmed that defendant was a manager or supervisor of a marijuana conspiracy. The district court relied upon the following factors: (1) the guilty pleas of the five defendants, (2) the admissions of two co-defendants that they drove defendant’s vehicles from California to Chicago with marijuana stored in hidden compartments, (3) defendant’s admission that he procured the first delivery vehicle with hidden compartments and hired a co-defendant to transport the drugs, (4) defendant stated that he would load the marijuana into the vehicle and deliver it to the courier, (5) in 1990, defendant transferred title of the car to the courier, and (6) in 1991, defendant obtained a second vehicle and driver, enabling him to transport more marijuana. Given the district court’s extensive findings concerning defendant’s control over the couriers, the enhancement was not clearly erroneous. U.S. v. Cantero, 995 F.2d 1407 (7th Cir. 1993).
7th Circuit affirms leadership enhancement based on conduct related to crime of conviction. (431) Defendant objected to having his base offense level increased by two levels for his leadership role in a drug activity based in part on work being done on defendant’s property to package cocaine for sale in small quantities. Defendant’s conviction was based on a sting operation in which defendant agreed to provide a large quantity of cocaine. The 7th Circuit concluded that the adjustment is not limited to cases in which the defendant supervised underlings in the particular transaction that is the foundation of the criminal charge. Nor was the fact that defendant needed to contact his supplier to fill the order in question sufficient to preclude the adjustment. However, the court did advise that district courts provide fuller explanations of their role findings than did the district judge in the instant case. U.S. v. Morales, 994 F.2d 386 (7th Cir. 1993).
7th Circuit affirms four level leadership enhancement for drug conspirator. (431) The 7th Circuit affirmed that defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive. The district court specifically found that defendant ruled the conspiracy with an iron fist through intimidation. It also found that the conspiracy would not have been the same without those who defendant recruited and worked with in distributing cocaine. At trial defendant was portrayed as the main gang member link to the conspiracy and as the one who recruited members and ran his own drug house. The criminal activity involved more than five people. U.S. v. Goines, 988 F.2d 750 (7th Cir. 1993).
7th Circuit says defendant need not control five or more people for managerial enhancement. (431) The 7th Circuit affirmed a three level enhancement under section 3B1.1(b) based upon defendant’s managerial role in a cocaine conspiracy involving five or more participants. The guideline does not require the defendant to control five or more people. Application is proper if the defendant was a manager (i.e. exercised control over others involved in the scheme) and the scheme involved five or more people. Here, defendant directed two others, and there were at least six participants in the scheme. U.S. v. Goines, 988 F.2d 750 (7th Cir. 1993).
7th Circuit upholds leadership enhancement where defendant presented no evidence to support challenge. (431) The 7th Circuit rejected defendant’s challenge to a leadership enhancement under section 3B1.1(a). In imposing the enhancement, the district court relied upon defendant’s stipulation in his plea agreement that he was a leader and upon the evidence supporting the presentence report. Defendant presented no evidence at his sentencing hearing and therefore failed to meet his burden of production. The fact that the district court mistakenly attached the Rule 32(c)(3)(D) written findings to its judgment rather than the sealed PSR was harmless error. U.S. v. Isirov, 986 F.2d 183 (7th Cir. 1993).
7th Circuit affirms that defendant was leader and not mere manager. (431) Defendant argued that he was not an “organizer or leader” but rather a “manager or supervisor” of a drug conspiracy. The 7th Circuit rejected this and upheld a four level enhancement under section 3B1.1(a). The district judge found that defendant directed more than a dozen people and utilized considerable assets in several states. The court stated that defendant was definitely a “kingpin” in the operation. U.S. v. Yanez, 985 F.2d 371 (7th Cir. 1993).
7th Circuit says objection to two-level role enhancement was waived despite objection to four-level enhancement. (431) The probation officer had recommended that defendant be given a four-level role enhancement under 3B1.1, but defendant objected that the evidence was inadequate to show that five participants were involved. Defendant never objected to the enhancement on the ground that he did not play a leadership role, and he specifically stated at sentencing that a two-level enhancement was appropriate. The 7th Circuit concluded that defendant’s conduct waived the objection to the two-level enhancement, and found no plain error. U.S. v. Rivero, 993 F.2d 620 (7th Cir. 1993).
7th Circuit affirms that criminal activity was “otherwise extensive.” (431) The 7th Circuit upheld a four-level leadership enhancement under section 3B1.1(a), affirming defendant’s cocaine distribution ring was “otherwise extensive.” Defendant’s venture included the help of: Hendrix, who managed the Wisconsin operations; Lee, who regularly distributed the Wisconsin shipments; Sylvia, who attempted to coordinate one of defendant’s deals in Miami; and Ruiz, who was present during the delivery of a kilogram of cocaine to undercover agents. Also involved were two other participants in New Jersey, and a number of individuals arrested in Bermuda. U.S. v. Cojab, 978 F.2d 341 (7th Cir. 1992).
7th Circuit affirms leadership enhancement for drug supplier. (431) The 7th Circuit affirmed a two level increase under section 3B1.1(c) based on defendant’s leadership role in a cocaine distribution conspiracy. In a narcotics-selling network that included numerous others, defendant was the “ultimate supplier, the Big Cheese.” He was the one seen counting stacks of money in his apartment. U.S. v. Jackson, 974 F.2d 57 (7th Cir. 1992).
7th Circuit affirms leadership enhancement for sole supplier of cocaine conspiracy. (431) The 7th Circuit affirmed a leadership enhancement based on evidence that defendant was the sole supplier of cocaine to the other members of the conspiracy and that defendant recruited two others into the conspiracy. U.S. v. Banks, 964 F.2d 687 (7th Cir. 1992).
7th Circuit affirms leadership role based upon amount of cash and drugs defendant controlled. (431) Defendant raised, for the first time on appeal, the claim that he was not leader of the drug conspiracy under guideline section 3B1.1. The 7th Circuit affirmed the enhancement, finding no clear error. Defendant received frequent telephone calls from co-defendants and other known drug dealers. He also exhibited a very comfortable lifestyle with no means of employment. When the search warrant was executed, a large amount of cash in addition to cocaine was seized. His leadership role was amply demonstrated by his contact with other conspiracy members, and the amount of drugs and cash he controlled. U.S. v. Cooper, 942 F.2d 1200 (7th Cir. 1991).
7th Circuit affirms leadership role for “prime mover” in setting up cocaine transactions. (431) The 7th Circuit affirmed a two level enhancement under guideline section 3B1.1(c) based upon defendant’s leadership role in a drug conspiracy. Testimony at trial demonstrated that defendant was the “prime mover” in setting up the cocaine distribution organization. Defendant had approached a co-conspirator and asked him to become involved in selling cocaine. He then gave money to the co-conspirator in order to buy cocaine for defendant; defendant would in turn provide the cocaine to others for distribution. U.S. v. Welch, 945 F.2d 1378 (7th Cir. 1991).
7th Circuit affirms managerial enhancement for prisoner who persuaded prison guard to smuggle contraband into prison. (431) The 7th Circuit affirmed an enhancement under guideline section 3B1.1(c) based upon defendant’s managerial role in an conspiracy to smuggle drugs into prison. Defendant was a prisoner, and he talked a prison guard into smuggling in contraband so that the guard could prove that he was the prisoner’s friend. Defendant arranged for his girlfriend to bring a second set of drugs to the prison, and persuaded the guard to meet with her to pick up the drugs. The trial court concluded that the guard was a weak person easily influenced by others, and that defendant was adept at influencing the guard. U.S. v. Lewis, 954 F.2d 1386 (7th Cir. 1992).
7th Circuit affirms managerial enhancement for fence who requested specific merchandise from thieves. (431) Defendant was a fence who paid for stolen goods with cocaine. The 7th Circuit affirmed a managerial enhancement under section 3B1.1(c), ruling the district court could have found that defendant managed a “stable of thieves” by requesting them to supply him with specific merchandise. Although the district court could have found that the burglars were “independent entrepreneurs” rather that defendant’s “minions,” the appellate court would not disturb a determination that could have gone either way. The court rejected that the prosecutor’s contention that the section 3B1.1(c) enhancement is proper for a fence just because the fence, by offering to buy goods, makes burglary more profitable. U.S. v. Ferra, 948 F.2d 352 (7th Cir. 1991).
7th Circuit affirms managerial role of defendant who had authority to permit others to join conspiracy. (431) The 7th Circuit affirmed defendant’s managerial role in a drug conspiracy begun by his brother. The defendant did not recruit the conspirator who joined the conspiracy later, but he did exercise the authority to let the conspirator join the conspiracy. Defendant testified that he had the authority to let others into “the chain” without having to consult with his brother or anyone else. Defendant trained the conspirator to take his place, and directed his activities in Indiana. The court found defendant’s claim that he was merely an intermediary who communicated orders was unpersuasive. Defendant was in a position of trust as his brother’s contact in Indiana. When the conspirator arrived in Indiana with the marijuana from the brother, defendant doled it out to the distributors. Defendant also handled large amounts of “buy” money. The fact that defendant was supervised by his brother did not disprove his supervisory role over others. U.S. v. Lawson, 947 F.2d 849 (7th Cir. 1991).
7th Circuit affirms that two defendants can qualify as organizers. (431) Defendant was recruited by a businessman to burn down the building of a competitor. Defendant in turn recruited two other people to assist him in two separate efforts to burn the building. Following both fires, defendant received a payment from the businessman, and distributed a share of it to his accomplices. However, he kept most of the money himself. The 7th Circuit affirmed that this was sufficient to support the district court’s determination that defendant was an organizer under guideline section 3B1.1. The district court could assign the same degree of responsibility to defendant as to the businessman. Co-defendants can both qualify as organizers. U.S. v. Golden, 954 F.2d 1413 (7th Cir. 1992).
7th Circuit rejects claim that enhancement was based on evidence presented at co-defendants’ hearings. (431) Defendant claimed that the district court erroneously found him to be a “leader” based upon testimony presented at his co-defendants’ sentencing hearings. The 7th Circuit found no merit to this claim, since the district court referred only to interpretations of various guideline provisions which it had adopted during the other sentencing hearing. Moreover, the presentence report contained more than enough information to find that defendant was a leader of the conspiracy. He located the cocaine sources, organized the Milwaukee to Los Angeles shipments, and recruited couriers. He also stored the cash and cocaine in his home, profited significantly from the illegal activity, and he alone was referred to as “the King” and “Big Cheese.” U.S. v. Thompson, 944 F.2d 1331 (7th Cir. 1991).
7th Circuit upholds leadership enhancement for defendant who initiated drug conspiracy. (431) The 7th Circuit upheld a four level enhancement under guideline section 3B1.1(a) based upon defendant’s role as leader of a drug conspiracy. Defendant initiated the conspiracy, obtained its source of supply, and retained a leadership role throughout its existence. U.S. v. Robinson, 956 F.2d 1388 (7th Cir. 1992).
7th Circuit upholds managerial enhancement even though defendant only controlled three of seven participants. (431) Defendant received a three level enhancement under guideline section 3B1.1(b) for managing a criminal activity involving five or more participants. The district court found that defendant managed seven participants in the drug conspiracy. The 7th Circuit affirmed the enhancement, even though it found that defendant actually managed only three of the seven participants. Two individuals gave defendant money to purchase cocaine in amounts too large for personal consumption. Although it was reasonable to infer that these individuals were reselling the cocaine on the street and were probably co-conspirators with defendant, there was no evidence that they were defendant’s employees or subordinates. However, even though defendant did not control all of the participants, the enhancement was still proper. The plain language of section 3B1.1(b) requires only that a defendant be a manager and that the criminal activity involved five or more participants. A defendant need not manage or control the five or more participants. U.S. v. McGuire, 957 F.2d 310 (7th Cir. 1992).
7th Circuit upholds organizer enhancement for defendant who linked drug supplier to undercover purchasers. (431) The 7th Circuit affirmed a two level enhancement under guideline section 3B1.1(c) for a defendant who played a central role in coordinating the five individuals who worked together to supply cocaine. The evidence showed that defendant was the key figure linking the supplier with the undercover purchasers. Defendant was at each of the meetings where the drug deals were planned, his home was the contact location, and he was present at each transaction. U.S. v. Cochran, 955 F.2d 1116 (7th Cir. 1992).
7th Circuit affirms that scheme involving innocent third parties was extensive. (431) The 7th Circuit affirmed that defendants’ scheme to fraudulently obtain HUD-insured mortgage loans was “extensive” for purposes of enhancement under guideline section 3B1.1(a). The scheme involved four criminally responsible participants and “the unknowing services” of at least four other individuals. Although application note 2 references “many” outsiders, there is no prescribed minimum number of persons needed to permit an enhancement under section 3B1.1. All that is required to find that a scheme is “otherwise extensive” is that the defendant directed at least one criminal participant. The involvement of several other knowing and unknowing individuals was a sufficient ground for the district court to find that the scheme was extensive. U.S. v. Miller, 962 F.2d 739 (7th Cir. 1992).
7th Circuit affirms that defendants were leaders of fraudulent loan scheme. (431) The 7th Circuit affirmed that defendants were leaders of a fraudulent loan scheme. Defendants orchestrated the scheme by recruiting the services of both criminally culpable individuals and innocent third parties, and were in direct control of others, particularly two individuals who they directed in their role as phoney sellers of property. Defendants also received the bulk of the loan proceeds. U.S. v. Miller, 962 F.2d 739 (7th Cir. 1992).
7th Circuit affirms managerial role of defendant who supervised crack house. (431) The 7th Circuit upheld the district court’s determination that defendant had a managerial role in a drug distribution ring. The evidence clearly established that defendant played a larger role in the drug ring than most of the other participants. Two conspirators testified that the leader of the drug ring would frequently hand defendant cocaine in exchange for money. Another conspirator testified that it was defendant who distributed guns to the street dealers, and who was one of only three people who cooked cocaine at the crack house. Another conspirator testified that after he made sales, he gave the money to defendant. He also described defendant as directing the work of numerous street dealers who operated out of the crack house. This view of defendant’s role was joined by the conspirator who managed the other crack house in the operation. U.S. v. Jackson, 935 F.2d 832 (7th Cir. 1991).
7th Circuit affirms leadership role of drug supplier. (431) Defendant contended that he should not have received a two-level enhancement under guideline § 3B1.1(c) because he and his co-conspirators merely had a “buyer-seller” relationship. The 7th Circuit affirmed the enhancement, finding no clear error. The co-conspirators, whom the district court determined to be telling the truth, testified that defendant was the supplier of the cocaine, set the price for the cocaine, had decision-making authority over the details of the distribution of the cocaine, and physically oversaw a two-kilogram deal. Several of these factors were corroborated by the testimony of undercover agents. U.S. v. Ruiz, 932 F.2d 1174 (7th Cir. 1991).
7th Circuit affirms defendant’s supervisory role over common-law wife. (431) Defendant admitted driving to Florida about 12 times to pick up quantities of cocaine which he then delivered to people in Milwaukee. During one of his trips, a confidential informant contacted defendant’s home and arranged a drug transaction with defendant’s common-law wife. The 7th Circuit affirmed a two-point enhancement based on defendant’s supervision of his wife. Defendant and his wife were indicted together for conspiracy to possess and distribute cocaine. There was evidence that defendant and his wife consulted regarding the sale to the informant, that defendant was aware his wife sold cocaine, that defendant knew where his wife purchased the cocaine she sold and that he had introduced her to the supplier. Thus, it was proper for the district court to conclude the wife conducted drug sales for defendant while he was out of town. U.S. v. Hernandez, 931 F.2d 16 (7th Cir. 1991).
7th Circuit affirms defendant’s managerial role in directing prison conspiracy to distribute drugs. (431) The 7th Circuit affirmed the district court’s upward adjustment of 3 levels under § 3B1.1(b) for defendant’s role as a manager or supervisor in a prison conspiracy to distribute heroin. There were five criminally responsible participants, including three inmates and two outside assistants. Defendant directed one co-defendant to obtain an $800 money order to purchase the heroin, asked another to purchase the heroin, and when he failed, engaged the services of two other people. Defendant also used another prison inmate to relay messages to the inmate’s girlfriend on the outside. U.S. v. Feekes, 929 F.2d 334 (7th Cir. 1991).
7th Circuit upholds leadership enhancement for defendant who laundered proceeds of drug conspiracy. (431) Defendant was convicted of laundering the proceeds of a marijuana distribution conspiracy. The 7th Circuit upheld an enhancement based upon defendant’s leadership role in the conspiracy. The district court found that defendant “ranked at the top of the hierarchy. He was the procurer, he was the recipient of the money for the marijuana, which he may or may not have passed on to others.” Without defendant, his co-conspirators had nothing as far as drugs were concerned. U.S. v. Atterson, 926 F.2d 649 (7th Cir. 1991).
7th Circuit upholds leadership enhancement for defendant who exercised authority over other members of conspiracy. (431) The 7th Circuit rejected defendant’s contention that the government needed to prove he was a manager of a drug conspiracy by proof beyond a reasonable doubt, finding that the appropriate standard is a preponderance of the evidence. Reviewing this issue under the clearly erroneous standard, the court upheld the district court’s findings. Defendant received the greatest share of the profits, he recruited an individual to procure a loan to purchase methamphetamine for distribution, he directed another member of the conspiracy, he asserted to an undercover agent that he could obtain methamphetamine directly from the “cooker,” and he assured the undercover agent that he would “corner the [local] methamphetamine market.” U.S. v. Spillman, 924 F.2d 721 (7th Cir. 1991).
7th Circuit upholds leadership role of defendant who directed drug couriers and managed funds. (431) Defendant coordinated a drug importation and distribution network that paid couriers to transport drugs and money between various locations. The 7th Circuit upheld the district court’s determination that defendant was an organizer or leader. The scope of the illegal activity was extensive, encompassing several couriers, cross-country trips, and numerous drug-for-money transactions. Defendant was the “linchpin” of the operation. He ordered couriers from the supply cities to the destination cities, ordered payments and provided funds. He also selected the couriers’ clothing so that they would be less conspicuous when travelling. U.S. v. McKenzie, 922 F.2d 1323 (7th Cir. 1991).
7th Circuit finds that defendant was a leader based upon division of proceeds. (431) Defendant properly received a four level enhancement under guideline § 3B1.1(a) for being a leader. The offense involved five persons who stole money from a savings bank. Defendant’s paramour, an employee of the bank, provided the keys to enter the bank and open the automatic teller machines. Defendant went with her, taking steps to cover their traces. The 7th Circuit found that the division of proceeds alone (defendant admitted to taking about one-third of the money; the prosecution calculated two-thirds), and the fact that the bank employee apparently had no criminal ambitions until defendant appeared on the scene, supported the district court’s determination that defendant had a lead role. U.S. v. Busche, 915 F.2d 1150 (7th Cir. 1990).
7th Circuit upholds leadership role for supplier of cocaine. (431) The 7th Circuit found that the evidence clearly supported the district court’s determination that defendant was a leader of a cocaine distribution conspiracy. Defendant received a greater share of the profits, was the supplier of the cocaine, directed others in the distribution of the cocaine, physically supervised the distribution of the cocaine, and maintained decisionmaking authority over the entire operation. U.S. v. Franco, 909 F.2d 1042 (7th Cir. 1990).
7th Circuit upholds finding that defendant who remained in background was organizer of drug transaction. (431) Although defendant remained in the background through most of the transaction, the evidence showed that the other participant in the transaction was unwilling to act independently of defendant, and always deferred to defendant. The 7th Circuit found that this evidence adequately supported the conclusion that defendant was an organizer or leader of the transaction. U.S. v. Camargo, 908 F.2d 179 (7th Cir. 1990).
7th Circuit upholds “organizer and leader” adjustment in stolen mail case. (431) Defendant claimed that she was merely a pawn in the mail theft scheme. However, the 7th Circuit upheld the district court’s factual findings that defendant played a leadership and organizational role in the scheme. The court noted that “it is not necessary that [defendant] control all aspects of the scheme to be an organizer or a leader.” It was sufficient that the defendant had organized or managed one other person in the scheme. U.S. v. Brown, 900 F.2d 1098 (7th Cir. 1990).
7th Circuit rules defendant was “organizer” of his wife’s criminal activities. (431) Defendant was arrested at the Chicago train station with his wife. Their bags contained almost 5 kilograms of cocaine. The district court ruled that the defendant was the “organizer” of the couple’s criminal activity, which increased his offense level by two levels under guidelines § 3B1.1(c). The Seventh Circuit agreed, finding that the defendant’s control over his wife was easily established from the evidence, and the guidelines contain no “spousal exception” to the “organizer” guideline. U.S. v. Herrera, 878 F.2d 997 (7th Cir. 1989).
8th Circuit rejects safety valve for leaders or organizers of drug conspiracy. (431) Defendants Paul and Randy each pled guilty to conspiracy to grow marijuana. The district court sentenced both defendants to 60 months, the mandatory mini¬mum, ruling that the “safety valve” in 18 U.S.C. § 3553(f) did not apply because of their aggravating roles under § 3B1.1(c). The Eighth Circuit upheld the role enhancements for both defendants. Traci, Paul’s ex-wife, testified that Paul directed her to water marijuana plants. She also watched their children while defendant harvested marijuana; bought products like Ziploc bags, potting soil, and a food saver machine; watered marijuana plants; and transplanted marijuana plants. Randy also held an aggravating role, because part of Paul’s “responsibility” was to water Randy’s plants occasionally while Randy was out of town. A farmhand also testified that the Randy asked him to retrieve a bag of marijuana from another building and deliver it to Randy. This farmhand also testified that he helped drill holes in the field for Randy so that Randy could plant marijuana. U.S. v. Irlmeier, 750 F.3d 759 (8th Cir. 2014).
8th Circuit upholds managerial role for defendant even though he also reported to others. (431) Defendant was convicted of methamphetamine conspiracy charges. He challenged a three-level enhancement under § 3B1.1 for his role as a manager or supervisor, arguing that he was a middleman who had no control over any of his co-conspirators. The Eighth Circuit upheld the enhancement. On several occasions, defendant directed his co-conspirator to transport drugs and drug proceeds. He provided his co-conspirator with the drugs for transport and with the numbers of bank accounts in which to deposit the drug proceeds. The fact that defendant reported to others in the conspiracy did not negate his role in managing and supervising the activities of a co-conspirator. U.S. v. Rodriguez, 741 F.3d 905 (8th Cir. 2014).
8th Circuit agrees that defendant held leadership role over confederate who sold drugs to informant. (431) Defendant and confederate Otis worked together to distribute methamphetamine. They were arrested after an informant made a series of controlled buys from Otis. In each case, the informant went to Otis’s house, Otis then drove to defendant’s garage to pick up the meth, and Otis returned to his house to sell the drugs to the informant. Two controlled buys failed because defendant was not available. At trial, eight other customers testified that Otis often served as the middle man between buyers and defendant. The Eighth Circuit upheld a § 3B1.1(c) increase for being an organizer, leader, manager or supervisor. Law enforcement officers could only successfully arrange controlled buys from Otis when defendant was available to supply the drugs. After Otis was released from a brief time in jail, defendant deposited about $80,000 for him in a bank. Defendant received pound quantities of meth from his source in DeWitt and redistributed the narcotics in Cedar Rapids. At defendant’s residence officers found a digital scale, baggies with twist ties, and other drug paraphernalia commonly used to distribute methamphetamine. U.S. v. Alexander, 714 F.3d 1085 (8th Cir. 2013).
8th Circuit agrees that defendant directed at least one other person in fraud scheme. (431) Defendant was involved with a fraud scheme where a sham corporation represented itself as a debt collection company to gain access to confidential databases, obtain personal information and open fraudulent accounts. Defendant pled guilty to one count of mail fraud. The Eighth Circuit upheld a four-level enhancement under § 3B1.1(a) for being the leader of criminal activity that involved five or more participants or was otherwise extensive. Defendant did not contest that the scheme was extensive, so the only question was whether he directed one other participant in the scheme. Evidence supported the conclusion that defendant, who was in Canada, directed another person to send money to a creditor from a U.S. address to avoid arousing suspicion by sending from money from Canada, since the corporation was supposed to be a U.S. company. Moreover, after defendant was arrested and many of the mail boxes in Canada were shut down, the company’s mail began to be forwarded to a new address in London, where a long-time friend of defendant’s lived. U.S. v. Adetiloye, 716 F.3d 1030 (8th Cir. 2013).
8th Circuit applies leadership increase based on daughter’s testimony that defendant told her to buy pills. (431) A jury convicted defendant of conspiracy to manufacture methamphetamine. The district court applied a two-level leadership enhancement under § 3B1.1(c) because it found that defendant had instructed his daughter Mandy to purchase pseudoephedrine pills. Defendant argued that this finding was erroneous because it was his wife, not defendant, who instructed Mandy to purchase the pills. The Eighth Circuit upheld the enhancement. Although Mandy testified that her mother asked her to buy pseudoephedrine pills, she also testified that she bought pseudoephedrine pills for defendant at his request on approximately six occasions, that defendant would give her money to purchase the pills, and that defendant gave her methamphetamine approximately six times. Given Mandy’s testimony, the district court did not clearly err in finding that defendant had instructed Mandy to purchase pseudoephedrine pills and, accordingly, did not err in imposing the two-level enhancement. U.S. v. Wells, 706 F.3d 908 (8th Cir. 2013).
8th Circuit agrees that defendant held management role in money laundering scheme. (431) A jury convicted defendant of methamphetamine charges, and conspiracy to commit money laundering. She challenged a three-level role enhancement under § 3B1.1(b), arguing she was not a “manager or supervisor” because Dizdarevic, whom the district court found defendant supervised, participated in the conspiracy prior to defendant’s involvement. The Eighth Circuit upheld the managerial role enhancement. The government presented evidence that defendant directed Dizdarevic’s activities on at least two occasions. Dizdarevic admitted in her post-arrest interview that when she deposited money into a co-conspirator’s account, defendant drove her to the bank, gave her the money and the account number, and instructed her on the proper procedure to make the deposit. Moreover, previous cases have rejected the argument that criminal activity by other participants prior to the time the defendant joined the conspiracy precludes the defendant from managing those prior participants. U.S. v. Hoffman, 707 F.3d 929 (8th Cir. 2013).
8th Circuit holds that drug conspiracy involved five or more participants. (431) Defendant was convicted of drug conspiracy charges, and received a four-level enhancement under § 3A1.1(a) for being an organizer or leader of criminal activity that involved five or more participants. Defendant did not dispute that he was a leader or organizer, but argued that the conspiracy did not have five or more participants. The Eighth Circuit disagreed, and upheld the enhancement. The court did not clearly err in finding co-defendant Manzanares participated in the conspiracy. First, Manzanares pleaded guilty to participating in the conspiracy defendant led. Second, a federal agent’s testimony at sentencing regarding a transaction between co-conspirator Motzko and Manzanares was sufficient to establish Manzanares was a participant. Motzko’s trial testimony about the multiple drug transactions he conducted with Manzanares provided further evidence. The panel rejected defendant’s argument that Blahnik was not a participant. The evidence established an ongoing relationship in which defendant was Blahnik’s supplier. U.S. v. Garcia, 703 F.3d 471 (8th Cir. 2013).
8th Circuit says sophisticated means and leadership increases were not double counting. (431) To reduce his company’s insurance premiums for workers’ compensation, defendant manipulated various factors used to calculate the premium, such as total wages covered, job classifications, and history of work-related injuries. He received a sophisticated means enhancement under § 2B1.1(b)(10)(C), and a leadership increase, under § 3B1.1(a), based on his role in a scheme that was “otherwise extensive.” The Eighth Circuit rejected defendant’s argument that the two enhancements constituted double counting. The increases concerned conceptually separate notions. The sophisticated means enhancement concerned the execution or concealment of an offense – the “how.” In contrast, in assessing whether an organization is “otherwise extensive,” the leadership role enhancement is not as concerned with the “how,” but rather the “how far” and “who.” The sentencing court here was careful to bifurcate these enhancements to ensure that each was uniquely supported by the facts. U.S. v. Sethi, 702 F.3d 1076 (8th Cir. 2013).
8th Circuit denies safety valve relief to supervisor of meth conspiracy. (431) Defendant pled guilty to methamphetamine charges. She gave information to law enforcement under a proffer agreement. The district court denied a safety-valve reduction under 18 U.S.C. § 3553(f), finding that she was a “supervisor” under guideline § 3B1.1(c), and that she gave incomplete and false information in her proffer. The Eighth Circuit found no clear error. According to the testimony, defendant directed a co-conspirator to buy seven ounces (almost 200 grams) of meth. A number of other times, defendant directed another man to sell meth and then collected the money from him. Thus, she “control[led] another participant in [the] drug trafficking offense.” U.S. v. Gamboa, 701 F.3d 265 (8th Cir. 2012).
8th Circuit says defendant failed to show that borrower was not a participant in mortgage fraud. (431) Defendant, an employee at a mortgage funding company, pled guilty to wire fraud in connection with a mortgage fraud scheme. He and another employee of the company, made numerous misrepresentations in order to help Shaw, a borrower, purchase certain properties. When Shaw stated that he did not want to do anything illegal, defendant assured him that various misstatements were standard procedure in the mortgage business. Defendant challenged a § 3B1.1(b) leadership increase, arguing for the first time on appeal that Shaw was not a criminally responsibly party. The Eighth Circuit ruled that it was not clear and obvious at the time of sentencing that Shaw was not a participant. Shaw testified that he knowingly overstated his income on the two loan applications, falsely stated that he would occupy each purchased property as his primary residence, and knowingly under-reported the sellers’ financial concessions. Although Shaw had indicated to defendant that he did not want to do anything illegal, he nonetheless acknowledged that he was responsible for the misrepresentations. U.S. v. Johnson, 688 F.3d 444 (8th Cir. 2012).
8th Circuit upholds three-level supervisory role increase. (431) Between 2002 and 2007, defendant participated in a methamphetamine conspiracy. He traveled to Des Moines, Iowa, to monitor meth deliveries and to collect payments for the conspiracy’s leader, Cid. The Eighth Circuit held that the district court did not err in applying a three-level managerial role increase. The district court found that defendant acted as Cid’s “eyes and ears” in Des Moines. While he did not specifically direct behavior, he ensured that the operation went according to plan and that the proceeds got back to California. The enhancement does not require control over at least one other participant. One permissible view of the evidence was that defendant supervised the conspiracy’s Des Moines deliveries and payments. The exercise of “management responsibility over the property, assets, or activities of a criminal organization” may warrant enhancement. Note 2 to § 3B1.1. U.S. v. Moreno, 679 F.3d 1003 (8th Cir. 2012).
8th Circuit holds that attorney held leadership or organizing role in fraud scheme. (431) Defendant, an attorney, and his mother were convicted of charges stemming from a fraud scheme involving a website offering a sham tutorial program, CyberStudy. He challenged a § 3B1.1(a) leadership enhancement, arguing that he was, at most, a manager or supervisor, and that his mother was the true leader and figurehead of the organization. The Eighth Circuit disagreed. Hollie testified that defendant had a leadership position with CyberStudy. She stated that although he did not generate many of the ideas that propelled the scheme, he helped implement his mother’s ideas by instructing employees. Four employees each testified that Morris acted as CyberStudy’s attorney. As the company’s attorney, he had a degree of authority. He drafted all of the legal documents for the organization, including customer agreements and letters threatening collection actions and immigration actions. He also negotiated a contract with K-Mart. Defendant was also in charge of all banking for the company. Lastly, defendant, like his mother, took a substantial amount of money from CyberStudy’s bank account for personal use. These facts support the district court’s determination that defendant was a leader or organizer under § 3B.1.1(a). U.S. v. Louper-Morris, 672 F.3d 539 (8th Cir. 2012).
8th Circuit agrees that fraud scheme involved five or more participants or was otherwise extensive. (431) Defendant and her attorney son were convicted of charges stemming from a fraudulent scheme involving a website offering a sham tutorial program. The Eighth Circuit upheld a § 3B1.1 enhancement for her role as a leader or organizer of a criminal activity involving five or more participants. The record conclusively showed that five or more individuals were participants within the meaning of § 3B1.1. Hollie testified that defendant was the leader of five or more “criminally responsible” individuals. She identified four individuals who all forged signatures on the power-of-attorney forms in order for the company to receive a tax credit. This was corroborated by Williams. A fifth individual testified that she left the employment of defendant’s company because she no longer felt comfortable “marketing something that wasn’t there” i.e., marketing the software even though it lacked educational content. Moreover, in addition to involving more than five participants, the district court found that the fraud was “otherwise extensive” because defendant recruited numerous individuals to assist in customer recruitment and tax form preparation. U.S. v. Louper-Morris, 672 F.3d 539 (8th Cir. 2012).
8th Circuit finds sufficient evidence that defendant held aggravating role in conspiracy. (431) Defendant was convicted of conspiracy to make a false statement and making a false statement to an FBI agent in connection with the disappearance of her 14-year-old niece. The Eighth Circuit held that any error in applying a § 3B1.1(c) leadership enhancement was harmless, because the record contained sufficient evidence that defendant was an organizer, leader, manager, or supervisor. Trial testimony supported a finding that defendant did more than “merely suggest” that others in the house lie about what happened to her niece. Defendant’s husband testified that on the night his niece died, defendant told him not to call the police or an ambulance, and Holdman testified that defendant threatened to kill her and her unborn baby if she called for an ambulance. Both Holdman and defendant’s husband testified that defendant “instructed” the group to tell people her niece had gone to live with an aunt. Further, Holdman stated that defendant threatened to kill her and her unborn child if she ever told anybody what really happened to the girl. U.S. v. Richart, 662 F.3d 1037 (8th Cir. 2011).
8th Circuit rules defendant had leadership role in kidnapping conspiracy. (431) Defendant was convicted of drug charges and kidnapping. The court applied a four-level leadership increase based on defendant’s role in the kidnapping of Tapia, a member of a rival drug group that owed defendant money. The Eighth Circuit affirmed. Garcia, the leader of the rival gang, testified that Tito, a disgruntled member of the gang, monitored Garcia’s and Tapia’s actions and reported their location back to defendant in order to enable defendant to effectuate Tapia’s kidnapping. Defendant supervised at least one person when he directed Tito to inform him of Garcia’s whereabouts. U.S. v. Rodriguez-Ramos, 663 F.3d 356 (8th Cir. 2011).
8th Circuit agrees that defendant held leadership role in kickback scheme. (431) Defendant, a surgical and administrative assistant for a neurosurgeon, was convicted of aiding and abetting a violation of the Medicare anti-kickback statute, and related charges. The Eighth Circuit upheld a § 3B1.1(c) organizer enhancement, rejecting defendant’s argument that he did not exercise control over another participant in the conspiracy. Wall, the charge nurse, testified that defendant recruited him into the kickback scheme, told him to order products from defendant’s wife’s company, and convinced him to sign a false promissory note and a cashier’s check designed to make the kickbacks appear to be loans. The government presented financial records supporting Wall’s version of events, along with admissions by defendant that partially corroborated Wall’s account. This was sufficient to support the enhancement. U.S. v. Yielding, 657 F.3d 688 (8th Cir. 2011).
8th Circuit applies managerial role enhancement to defendant to who directed associate to drive him. (431) Defendant pled guilty to conspiring to distribute and possess cocaine and cocaine base. The district court found that defendant’s role in the conspiracy was “significant,” and that the facts supported a three-level managerial enhancement under § 3B1.1(b). The Eighth Circuit agreed. Defendant admitted that he transported and/or directed the transportation of drugs to St. Louis. Because defendant had a suspended license, he would have Henley drive him to St. Louis and to deliver drugs. These admissions established that defendant directed and controlled Henley as part of the conspiracy. Moreover, defendant admitted handling large quantities of drugs and money, supporting the court’s finding that his role was “significant.” U.S. v. Cole, 657 F.3d 685 (8th Cir. 2011).
8th Circuit counts individuals recruited by defendant to cash counterfeit checks as participants. (431) Defendant recruited other individuals to cash counterfeit checks as part of a fraudulent check-cashing scheme. He argued that the district court erred in applying § 3B1.1(b) to enhance his offense level because the individuals he recruited did not qualify as participants, and thus he could not have been a manager or supervisor. The Eighth Circuit disagreed. The district court did not clearly err in finding that the recruited individuals knew or were willfully blind to the fraud. During sentencing, the court found that their testimony that they did know the scheme was fraudulent was “simply not credible.” The record supported this finding. The recruits knew that they had not earned the money nor had any other relationships to the businesses that supposedly issued the checks to them, and they only received part of the money from the cashed checks. U.S. v. Butler, 646 F.3d 1038 (8th Cir. 2011).
8th Circuit approves role increase where defendant used his wife to drive him to drug transactions. (431) Defendant was convicted of multiple cocaine-related charges. The Eighth Circuit upheld a § 3B1.1(c) managerial role enhancement. The unobjected to portions of defendant’s PSR showed that defendant’s wife chauffeured him during a drug sale to the confidential informant. Further, at sentencing, a drug customer testified that defendant had directed him to buy cocaine from defendant’s wife when defendant was in jail, and that defendant had often used his wife to drive the car on drug deals. In light of this evidence, the district court did not clearly err in concluding that defendant was an organizer, leader, manager, or supervisor in the drug-trafficking activity. U.S. v. Hull, 646 F.3d 583 (8th Cir. 2011).
8th Circuit holds that police officer had leadership role in electronics theft. (431) Defendant, formerly a police officer, stopped a woman in possession of stolen electronics, seized the electronics, and shared them with an informant and an accomplice. Defendant booked the woman on outstanding traffic warrants, but never charged her with possession of the stolen electronics and never reported their recovery to the police department. The Eighth Circuit upheld a § 3B1.1(c) leadership increase. It was defendant who initially planned the offense and who recruited an accomplice in the form of another police officer. Defendant was the senior officer by three decades, and when they discovered the woman, it was defendant’s decision to take the property and split it up at the house of his accomplice’s parents, and defendant made the decision to share some of the stolen equipment with the informant. U.S. v. Jackson, 639 F.3d 479 (8th Cir. 2011).
8th Circuit upholds leadership increase despite scant evidence of defendant’s control over accomplices. (431) Defendant pled guilty to cocaine conspiracy charges. The Eighth Circuit held that the district court did not clearly err in finding that defendant was a manager or supervisor of the drug conspiracy. The evidence was admittedly “scant” on the “degree of control” and “decision-making authority,” that defendant exercised over his accomplices. There was no evidence that defendant recruited anyone into the drug conspiracy or instructed anyone on where they had to sell their drugs or to whom. However, the factors supporting a role enhancement included defendant’s manufacture of the drug to be distributed and his distribution of the end product to others, at a price defendant set, for redistribution in smaller quantities. U.S. v. Gaines, 639 F.3d 423 (8th Cir. 2011).
8th Circuit agrees that defendant held leadership role in drug transactions to confidential source. (431) After a series of meetings and secretly taped telephone conversations between a confidential DEA source and defendant and his co-conspirators, defendant arranged for several sales of methamphetamine to the source. The Eighth Circuit upheld a two-level enhancement for defendant’s role in the offense under § 3B1.1(c). Given the testimony of the DEA agent who recorded the calls and authenticated the recordings, and the testimony of defendant’s nephew and co-conspirator, who identified defendant as the speaker, the district court did not clearly err in determining that defendant was speaker on the taped telephone conversations. The taped calls supported the increase. They revealed that defendant twice planned and organized the delivery of the meth to the confidential source by using two co-conspirators to consummate the transactions. U.S. v. Frausto, 636 F.3d 992 (8th Cir. 2011).
8th Circuit finds fraud and money laundering scheme was “otherwise extensive.” (431) Defendant was convicted of fraud and money laundering. He argued that the district court erred when it imposed a four-level enhancement for being “an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive.” § 3B1.1(a). However, the trial testimony conclusively established that far more than five persons assisted defendant in persuading the victims to invest and in setting up the elaborate financial arrangements by which he fraudulently diverted substantial sums to his personal use. Even if many of these cohorts were innocent dupes, the Eighth Circuit ruled that the 14-level enhancement was warranted because the criminal activity was “otherwise extensive.” U.S. v. Brown, 627 F.3d 1068 (8th Cir. 2010).
8th Circuit upholds managerial enhancement for defendant who recruited conspirator and directed others. (431) Defendant participated in an extensive drug conspiracy to distribute cocaine base in Cedar Rapids, Iowa. The Eighth Circuit held that the district court did not err in applying a role enhancement to defendant’s offense level. First, the PSR implicitly established that defendant recruited Neely into the conspiracy. Defendant advised Neely of the increased profits he could make selling drugs if Neely would relocate to Cedar Rapids, which Neely did. The implication of this conversation was clear. Defendant was recruiting a participant, not a competitor. In addition, other portions of the PSR supported the role enhancement. For example, it noted that defendant directed the activities of a co-conspirator during an attempted traffic stop in an attempt to evade police detection of some drugs. U.S. v. Bolden, 622 F.3d 988 (8th Cir. 2010).
8th Circuit finds that defendant directed his son’s drug sales. (431) Defendant challenged a leadership enhancement, noting that while his son’s testimony, if believed, might establish that he supplied his son with methamphetamine, defendant did not direct, organize, or supervise his son’s endeavors. The Eighth Circuit found these arguments unpersuasive. The record contained substantial evidence establishing that defendant directed his son. First, defendant exclusively supplied his son with methamphetamine for subsequent sales. Second, defendant controlled the proceeds of his son’s drug transactions. Finally, the phone call between defendant and his son, as well as his son’s testimony, supported a finding that defendant controlled, directed, and even intimidated his son in performance of acts in furtherance of their criminal activity. U.S. v. Zierke, 618 F.3d 755 (8th Cir. 2010).
8th Circuit finds sufficient evidence that defendant directed actions of co-conspirator. (431) Defendant and Umanzor pled guilty to conspiring to distribute more than 500 grams of methamphetamine. The Eighth Circuit found adequate support in the record for the sentencing court’s determination that defendant directed or controlled the actions of Umanzor. Umanzor delivered drugs to defendant or drove him to the sites of drug transactions on repeated occasions. On at least one occasion, immediately before Umanzor brought drugs to the transaction site, an undercover agent personally witnessed defendant call Umanzor and tell him to “grab the stuff from under the coach” and bring it to the transaction site. Given the evidence that Umanzor was following defendant’s instructions, the district court did not err in applying a § 3B1.1(c) aggravating role increase. U.S. v. Umanzor, 617 F.3d 1053 (8th Cir. 2010).
8th Circuit upholds organizer or leader enhancement for drug conspirator. (431) Defendant participated in a conspiracy that transported MDMA from Oakland to St. Louis, where the drugs were sold. Defendant’s role in the conspiracy was to acquire the drugs from a supplier, ship or transport the drugs to St. Louis, and arrange for the proceeds to be returned to the drug supplier in California. While defendant was incarcerated during the conspiracy, he introduced an accomplice to the supplier and arranged for the deliveries to continue. At sentencing, the district court enhanced defendant’s offense level by four levels under § 3B1.1 because he was an organizer or leader of the conspiracy. The Eighth Circuit affirmed, rejecting defendant’s arguments that the evidence showed that he was only a “middleman,” not an organizer or leader and that the enhancement was improper because other conspirators received lesser role enhancements. U.S. v. Williams, 605 F.3d 556 (8th Cir. 2010).
8th Circuit says person need not be found guilty to be participant in criminal activity. (431) At defendant’s sentencing for conspiracy to distribute crack cocaine, the district court enhanced his sentence by four levels under § 3B1.1 because the defendant was the organizer or leader of criminal activity involving at least five participants. On appeal, defendant argued that the district court erred because the five individuals identified by the district court were not charged with the conspiracy and did not plead guilty. The Eighth Circuit held that an individual need not be found guilty in order to qualify as a participant in criminal activity under § 3A1.1. U.S. v. Cosey, 602 F.3d 943 (8th Cir. 2010).
8th Circuit approves leadership increase for recruiting others, directing drug distribution, supplying drugs and retaining profits. (431) Defendant was convicted by a jury of crack cocaine conspiracy charges, and received a four-level increase for role in the offense. He contended that his role was not greater than a manager or supervisor (a three-level increase), and the district court did not take into account the different roles he had at different times. The Eighth Circuit affirmed. The district court found that defendant directed Cleaves and Ross, and it relied on their trial testimony in establishing defendant’s role in the offense. Trial evidence showed defendant recruited members of the conspiracy and directed those members to distribute drugs. There was evidence that he supplied drugs for distribution and retained a large portion of profit for himself. He also played a role in setting up transactions. U.S. v. Bolden, 596 F.3d 976 (8th Cir. 2010).
8th Circuit upholds leadership role despite major role played by another conspirator. (431) Defendant worked for an employment and training organization that was funded by grants from federal, state, and local governments. She pled guilty to fraud charges relating to the improper allocation of the time of company employees, and billing of the various government entities. She challenged a § 3B1.1 leadership increase, arguing that Bargman was “clearly” the organizer and leader of the criminal activity. Prior to Bargman’s arrival at the company, defendant received one or two salary increases a year, and that it was not until 2000, the year Bargman began his employment with the company, that defendant began to receive numerous bonuses. Moreover, Bargman supervised key employees and directed how employees were to bill their time, a key factor in the fraud scheme. Nonetheless, the Eighth Circuit upheld the leadership increase. The district court acknowledge Bargman’s major role in the operation and found that both defendant and Bargman were “equally culpable” regardless of the fact that the criminal activity did not start until after Bargman started at the company. U.S. v. Cunningham, 593 F.3d 726 (8th Cir. 2010).
8th Circuit holds that defendant was leader of fraud scheme that damaged hundreds of victims. (431) Defendant, using a religious-based appeal, defrauded people seeking lines of credit. The scheme’s victims paid defendant an up-front fee, but defendant never furnished the loan the fee was supposed to guarantee. The Eighth Circuit upheld a § 3B1.1(a) leadership increase for being an organizer or leader. Trial testimony from several of defendant’s employees confirmed that defendant devised the scheme and directed the activities of J.E. Capital Group and all of its employees. Defendant’s activities were “otherwise extensive.” The government provided evidence that defendant organized meetings for hundreds of people in Kansas City and across the United States. His schemes damaged hundreds of victims. Defendant rented several business locations, and at the height of the fraud scheme, defendant employed more than 20 people and directed their activities in support of his scheme. U.S. v. Branch, 591 F.3d 602 (8th Cir. 2009).
8th Circuit affirms role increase based on defendant’s substantial organizing activities. (431) Defendant, a farmer and licensed commodities broker, was convicted of multiple counts related to his promotion of two fraudulent “bank trading programs.” He argued that there was no evidence to support a § 3B1.1(c) increase for role in the offense. The Eighth Circuit disagreed. The record indicated that defendant (1) asked Kautt, an individual defendant solicited, to exchange about $60,000 in large denominations for smaller bills; (2) gave group presentations promoting investment in defendant’s scheme; (3) arranged meetings between the head of one company and potential investors; (4) emailed investors updates about the progress of the bank trading program; and (5) moved to Las Vegas for a period of time to help establish an office. These substantial organizing activities supported the enhancement. U.S. v. Keiser, 578 F.3d 897 (8th Cir. 2009).
8th Circuit finds defendant was leader, organizer or manager of drug conspiracy. (431) Defendant was involved in a conspiracy that used transported vehicles to carry drugs. The Eighth Circuit upheld a two-level enhancement for being a leader or organizer. The court heard testimony from two co-conspirators who testified that defendant had recruited them to assist him in picking up the vehicle. They both testified that defendant, who was the only one of the three who spoke English, coordinated the pick-up from the transportation company. One testified that defendant brought him from Arizona to Nebraska and offered to pay him $300 to sign for the vehicle. The truck driver who delivered the car testified that he recognized defendant’s voice as the one who called on the phone to coordinate the delivery. Finally, officers located the cell phone from which calls were made to the trucking company on defendant’s person, and defendant identified the phone as his. U.S. v. Bonilla-Filomeno, 579 F.3d 852 (8th Cir. 2009).
8th Circuit affirms role increase based on defendant’s substantial organizing activities. (431) Defendant, a farmer and licensed commodities broker, was convicted of multiple counts related to his promotion of two fraudulent “bank trading programs.” He argued that there was no evidence to support a § 3B1.1(c) increase for role in the offense. The Eighth Circuit disagreed. The record indicated that defendant (1) asked Kautt, an individual defendant solicited, to exchange about $60,000 in large denominations for smaller bills; (2) gave group presentations promoting investment in defendant’s scheme; (3) arranged meetings between the head of one company and potential investors; (4) emailed investors updates about the progress of the bank trading program; and (5) moved to Las Vegas for a period of time to help establish an office. These substantial organizing activities supported the enhancement. U.S. v. Keiser, 578 F.3d 897 (8th Cir. 2009).
8th Circuit finds defendant was leader, organizer or manager of drug conspiracy. (431) Defendant was involved in a conspiracy that used transported vehicles to carry drugs. The Eighth Circuit upheld a two-level enhancement for being a leader or organizer. The court heard testimony from two co-conspirators who testified that defendant had recruited them to assist him in picking up the vehicle. They both testified that defendant, who was the only one of the three who spoke English, coordinated the pick-up from the transportation company. One testified that defendant brought him from Arizona to Nebraska and offered to pay him $300 to sign for the vehicle. The truck driver who delivered the car testified that he recognized defendant’s voice as the one who called on the phone to coordinate the delivery. Finally, officers located the cell phone from which calls were made to the trucking company on defendant’s person, and defendant identified the phone as his. U.S. v. Bonilla-Filomeno, 579 F.3d 852 (8th Cir. 2009).
8th Circuit finds defendant was supervisor in health care fraud scheme. (431) Defendant and other family members worked in three family-owned health care agencies providing Medicaid in-home services. She and other relatives were convicted of conspiracy to commit health care fraud and making a false statement relating to a health care matter. The Eighth Circuit upheld a § 3B1.1(c) increase for being a supervisor of criminal activity. Although defendant argued that she had no decision-making authority, her great aunt testified that defendant was one of her supervisors at Complete Care, one of the agencies, told her what to do, and was also responsible for the billing. The great aunt also identified numerous time sheets with defendant’s initials as supervisor. In addition, another relative identified a Complete Care document in which defendant was titled “office manager.” Finally, Complete Care’s proposal to Medicaid identified defendant as Complete Care’s vice-president. U.S. v. Hayes, 574 F.3d 460 (8th Cir. 2009).
8th Circuit finds that defendant held managerial role in straw man scheme. (431) Defendant’s in-laws were the owners and officers of a residential development corporation. Defendant was employed as an agent of the company. When the company began encountering financial problems and could not find buyers for the homes it built, defendants began applying for mortgage loans in the names of various straw buyers. The Eighth Circuit upheld a § 3B1.1(c) enhancement based on defendant’s managerial role in the conspiracy. Co-conspirators testified as to defendant’s important role in almost every aspect of the conspiracy. Subcontractors testified defendant was consistently their main point of contact and supervised their work. Others testified that defendant solicited their participation in the scheme. Many of the victims dealt almost exclusively with defendant. U.S. v. Parish, 565 F.3d 528 (8th Cir. 2009).
8th Circuit holds that defendant who recruited and directed co-defendant was manager. (431) Defendant was convicted of conspiring to distribute methamphetamine. A co-defendant testified that defendant approached him while he was performing work on defendant’s residence and offered him employment in his drug trafficking ring. The co-defendant testified that he began collecting money and delivering drugs for defendant, that defendant gave him a phone to use for drug related business, and that defendant changed the number frequently. Further, a witness testified that when he arranged to buy methamphetamine from defendant, the co-defendant arrived to conduct the transaction. When the witness did not have enough money to pay both an existing debt and buy the meth, the co-defendant called defendant to receive instructions. Based on this evidence, the Eighth Circuit upheld the district court’s finding that defendant was a manager. U.S. v. Guzman-Tlaseca, 546 F.3d 571 (8th Cir. 2008).
8th Circuit upholds organizer enhancement where defendant directed co-conspirator to act as his driver. (431) The government presented evidence that Clark served as defendant’s driver for drug transactions and received little remuneration. Clark testified that he had driven defendant to several drug transactions. On the day of one controlled buy, Clark said he was helping another conspirator move a TV when defendant called and “told” Clark to “come get him,” without telling him why, “so [Clark] had left to go get him,” and then drove him to the deal. The Eighth Circuit found this evidence supported the district court’s decision to apply a §3B1.1(c) organizer enhancement. U.S. v. Brown, 539 F.3d 835 (8th Cir. 2008).
8th Circuit affirms managerial increase for defendant who operated business while boyfriend was “cook.” (431) Defendant and her live-in boyfriend were convicted of possessing pseudoephedrine knowing it would be used to manufacture methamphetamine. The Eighth Circuit ruled that the district court did not clearly err in finding that defendant had a managerial or supervisory role in the conspiracy. Defendant tended to the business end of the operation during the day, while her boyfriend was the cook. Defendant recruited the co-conspirators to obtain the cold pills and other items to be used to manufacture the methamphetamine. She then continued to cultivate relationships with the co-conspirators. She determined the amount of meth each co-conspirator would receive in exchange for his or her procurement of cold pills and other precursors. Defendant did all the prep work on the cold pills to ready them for the final “cook.” U.S. v. Canania, 532 F.3d 764 (8th Cir. 2008).
8th Circuit says buyers are participants if defendant “fronts” drugs to them. (431) Defendant was convicted of drug and firearms charges. The district court found that defendant was a manager or supervisor of the conspiracy, but that the conspiracy only involved three participants, because Steburg and Boldon were customers of defendant and not participants. On appeal, the Eighth Circuit reversed, noting that Steburg and Boldon testified that when they purchased the meth from defendant, they mostly paid cash, but defendant sometimes fronted the meth. When he fronted the meth, they were required to repay him after selling the meth to others. Therefore, Steburg and Boldon, though not convicted, were criminally responsible for the commission of the meth conspiracy and were participants in the offense. The Eighth Circuit held that the district court clearly erred in ruling otherwise, and should have applied a four-level enhancement under § 3B1.1(a). U.S. v. Garcia-Hernandez, 530 F.3d 657 (8th Cir. 2008).
8th Circuit finds defendant held leadership role in bank robbery. (431) Defendant was convicted of bank robbery. He challenged the § 3B1.1 leadership increase, claiming that his girlfriend, who also was involved in the robbery, was an equal partner and willing participant in the robbery. The Eighth Circuit disagreed and upheld the enhancement. Defendant’s girlfriend testified that defendant made the decision to rob a bank, asked her to enter the bank and see if any police were in the bank, and instructed her to hold the door open for him so the door would not lock. Defendant was the one who carried a knife and demanded money while the girlfriend held the door. Defendant decided they should buy a different car because the one they were driving had been used to commit multiple bank robberies, defendant was the one who paid the purchase price for the new car from the robbery proceeds, and defendant held the cash and controlled the expenditures. U.S. v. McDonald, 521 F.3d 975 (8th Cir. 2008).
8th Circuit upholds leadership increase. (431) Defendant challenged his receipt of a four-level organizer/leader enhancement under § 3B1.1(a), contending that at most, he was a manager or supervisor of the drug conspiracy, and therefore subject to only a three-level increase under § B1.1(b). However, the government presented testimony that defendant recruited others to join the conspiracy, he received drug orders from customers, and he directed others to package and deliver drugs. The district court found this testimony to be credible. Credibility determinations such as this are “virtually unreviewable on appeal.” Thus, the Eighth Circuit affirmed the leadership increase. U.S. v. Garcia, 512 F.3d 1004 (8th Cir. 2008).
8th Circuit upholds finding that defendant was manager of “otherwise extensive” meth operation. (431) Defendant was convicted of conspiring to distribute methamphetamine and related charges. The district court applied a three-level managerial role enhancement based on evidence that defendant hired and directed Nicomedis to make at least five trips to California to acquire meth, that Nicomedis was not considered a partner in the operation, and that Nicomedis helped package drugs for defendant. In addition, defendant supplied the money for the meth that Nicomedis and Juan had obtained from California and fronted meth to Juan for sale. The Eighth Circuit affirmed the increase. The evidence supported a finding that defendant was a manager or supervisor of the criminal activity. The district court also properly found defendant’s operation to be “otherwise extensive.” Defendant occupied a separate apartment for the sole purpose of operating a drug storehouse and cut lab. In this apartment, officers found mixing and cutting agents, cooking equipment, drug packaging materials, scales, and a significant amount of high purity meth. Based on this evidence, the relative infrequency of finding such an operation, and the volume of high purity meth found, a drug task force officer classified defendant’s operation as an extensive and fairly well organized one. U.S. v. Rosas, 486 F.3d 374 (8th Cir. 2007).
8th Circuit holds that defendant had leadership role in tax fraud scheme. (431) Defendant and his brother were involved in a scheme that recruited persons to file fraudulent federal and state income tax returns. The Eighth Circuit upheld the district court’s finding that both defendant and his brother were organizers or leaders of the criminal activity. Both defendants admitted that they arranged for the filing of tax returns by other individuals, recruited the participants, provided the fraudulent W-2 forms to tax preparers, and urged the participants to apply for refund anticipation loans. For some of the transactions, defendant also explained that after paying participants $1500 and paying recruiters $500, they shared the remainder of the federal refund. They both testified that they sometimes accompanied the participant to the tax preparer when the loan check or refund was ready, and they also typically held the copies of the tax returns filed by the participants. While defendant argued that he played a more limited role in the conspiracy than his brother, it is not necessary that each organizer or leader be responsible for the same actions in the criminal scheme. Defendant’s involvement in recruiting accomplices, planning the offense with his brother, and receiving a substantial share of the proceeds provided a sufficient basis to find that he was an organizer or leader. U.S. v. Mickle, 464 F.3d 804 (8th Cir. 2006).
8th Circuit holds that manipulation of unwitting participants supported departure. (431) Defendant was convicted of child pornography and sexual exploitation charges arising from his communications with a 13-year old girl, whom he persuaded to mail him naked photographs of herself. He argued that a § 3B1.1 aggravating role enhancement should not apply because the government did not offer evidence of any other criminally responsible participants. The government argued that defendant used multiple other people to facilitate his criminal conduct, including his mother (who mailed packages for him), two of the minor’s friends (who received packages from him for the girl) and two fellow residents of the treatment center where he lived. The Eighth Circuit found that any error was harmless, since the district court made clear that even if the adjustment did not apply, it would have departed upward to impose the same sentence. The factors described by the court were sufficient to justify a two-level upward departure from the advisory guideline range. Even if defendant’s mother, the girl’s friends, and the other civilly committed patients were unwitting participants in defendant’s criminal scheme, the evidence established that he manipulated these persons to assist in the child pornography offenses. Although defendant may not have managed or supervised these persons, the nature of the activity was sufficient to justify an enhanced sentence. U.S. v. Mentzos, 462 F.3d 830 (8th Cir. 2006).
8th Circuit applies managerial increase for instructing others to obtain drug precursors. (431) Defendant directed his girlfriend and Sanders, his nephew, to buy pseudoephedrine pills from local drug stores so that they could be used to produce methamphetamine. The Eighth Circuit held that the district court did not err in enhancing defendant’s sentence for acting as a manager or supervisor. Instructing others to obtain precursors used to produce methamphetamine is evidence of a managerial or supervisory role. Defendant instructed three people to obtain pseudoephedrine pills and bring them to him. He also provided the money to buy the pills. U.S. v. Voegtlin, 437 F.3d 741 (8th Cir. 2006).
8th Circuit agrees that defendant supervised drug courier. (431) The record demonstrated that, at a minimum, defendant was a supervisor/ contact person at the destination point for a drug courier on an Arizona-to- Minnesota drug shipment. When officers stopped the courier in Missouri and discovered drugs, the courier made statements implicating defendant as a supervisor. Defendant’s own actions showed that he played a supervisory role. When the courier called defendant and told him that her van had broken down, he traveled from Minnesota to Missouri. When he arrived at the courier’s van, he had a plane ticket and travel itinerary for the courier as well as the cell phone she had called. He had also wired the courier $300 prior to the trip. The Eighth Circuit found this evidence sufficient to show that defendants supervised the courier. U.S. v. Jimenez-Gutierrez, 425 F.3d 1123 (8th Cir. 2005).
8th Circuit affirms increase for leadership role in methamphetamine “cooks.” (431) Defendant and others manufactured methamphetamine at defendant’s residence. There were at least two to three cooks at his house each week. Defendant exchanged methamphetamine for precursor materials and equipment to use in the cooks. He directed most of the cooks at his residence and possessed two firearms, one that he carried while supervising the cooks and the other that he kept in the house to protect his methamphetamine operation. Defendant challenged a § 3B1.1 increase, alleging that he did not manage anyone and that other individuals simply used the methamphetamine lab for their own cooks. The Eighth Circuit affirmed the increase. The court based the enhancement on all the evidence, including the number of people involved in the conspiracy, the activity that took place in defendant’s house, evidence that defendant directed the cooks and directed others to get precursors or bury sludge in the backyard. U.S. v. Carpenter, 422 F.3d 738 (8th Cir. 2005).
8th Circuit upholds aggravating role adjustment where defendant recruited conspirator, gave him directions and took greater cut of profits. (431) The Eighth Circuit found no error in defendant’s receipt of a three-level aggravating role adjustment under § 3B1.1(b). There was direct evidence that defendant acted as supervisor of Lahaye in the marijuana venture. Defendant recruited Lahaye, gave him directions, monitored his progress and introduced him to other conspirators. Defendant took a greater proportion of the proceeds than Lahaye’s $5000 cut. There also was abundant evidence, including an admission in the plea agreement, that the venture involved five or more participants. The district court’s mandatory application of the guidelines to defendant’s case was not plain error. There was no evidence that the district court would have sentenced more leniently but for the Booker error. U.S. v. Shallal, 410 F.3d 434 (8th Cir. 2005).
8th Circuit holds that defendant’s own admissions supported managerial role enhancement. (431) Defendant pled guilty to conspiracy to manufacture methamphetamine. The Eighth Circuit found that defendant’s own testimony provided sufficient evidence to support a § 3B1.1 (c) managerial role enhancement. Defendant testified before a federal grand jury that in the 30 or so methamphetamine cooks he performed, Luetje was with him for at least half of them. He stated that Luetje purchased most of the pills for him and in exchange, he provided Luetje with meth. Defendant also testified that Wiltse purchased pills for him about six to eight times and that Wiltse’s husband drove him twice to obtain anhydrous ammonia. Finally, defendant stated that Harms got pills for him and would crush foils, get jars, and help him clean up after the cooks in exchange for meth. Based on this evidence, the government was able to demonstrate that defendant controlled at least one other participant in the drug trafficking offense. U.S. v. Mesner, 377 F.3d 849 (8th Cir. 2004).
8th Circuit says defendant was leader of scheme to hide assets. (431) Defendant was convicted of fraud charges for hiding his assets from the government. Much of the evidence presented against defendant showed that he played an organizing or leadership role in the offense. For example, one co-conspirator testified that defendant did all of the buying and selling of cars and told her which checks to write, deposit, and cash; several auto dealers testified that defendant had approached them in order to use their names and licenses illegally to buy and sell used cards; two conspirators testified that defendant had recruited them to assist in fabricating a story concerning an alleged $3000 owed by one conspirator to defendant; and there was testimony that defendant had instructed others to give false testimony to the grand jury and authorities. The entire scheme of illegal conduct existed for the purpose of hiding defendant’s assets and income so that he could avoid making payments to the government, and he was the motivating force behind the actions taken by others in pursuit of that scheme. U.S. v. Frank, 354 F.3d 910 (8th Cir. 2004).
8th Circuit holds that owner of gas station that illegally sold pseudoephedrine was leader. (431) Defendant owned and managed a gas station that ordered large amounts of pseudoephedrine, and then sold it to retail customers in excess of the three-unit limit imposed by federal law. The Eighth Circuit affirmed a § 3B1.1(c) leadership increase. Defendant was solely responsible for ordering pseudoephedrine from the distributor, a management activity. Further, on at least one occasion, a station cashier sought and received permission from defendant to sell pseudoephedrine to a co-conspirator in excess of the nominal three-unit limit, an act of supervision. U.S. v. Bewig, 354 F.3d 731 (8th Cir. 2003).
8th Circuit says defendant held aggravating role in drug trafficking conspiracy. (431) Defendant was part of a drug-trafficking conspiracy operating in several states. The Eighth Circuit held that the government provided adequate evidence to support a § 3B1.1(c) organizer or leadership enhancement. Romo testified that defendant approached him about transporting methamphetamine, and although Romo initially declined, he later changed his mind when defendant promised to pay $5000 for the trip. Further, when Romo phone the trailer upon arriving with drugs in South Sioux City, defendant answered the phone and instructed Romo where to park. He then watched as Alvarado unloaded the car, and gave Romo $500 for the trip back to California. Finally, defendant possessed authority to divert Romo’s last shipment of drugs to another person when he became suspicious law enforcement officers were watching him. U.S. v. Placensia, 352 F.3d 1157 (8th Cir. 2003).
8th Circuit agrees that defendant held aggravating role in meth conspiracy. (431) On several occasions, Upchurch obtained precursors, including starting fluid, pseudoephedrine, and coffee filters, at defendant’s request, so that he could manufacture methamphetamine. Defendant also asked Houser to place his three vehicles in Houser’s name, and asked Houser to purchase precursors for him on three occasions. Thus, the Eighth Circuit ruled that the district court did not err when it assessed a two-level upward adjustment for defendant’s role in the offense. U.S. v. Yerkes, 345 F.3d 558 (8th Cir. 2003).
8th Circuit concludes that participant need not be named in the indictment. (431) The district court found that defendant was a leader of a criminal activity involving at least five participants, one of whom was not charged in the indictment. However, this conspirator testified that he flew to California to pick up methamphetamine and delivered it to defendant in Missouri. He also testified that defendant hired him to drive defendant around, to collect money, and to deliver drugs. Therefore, he was properly counted as a participant. The Eighth Circuit ruled that the record supported the leadership enhancement. U.S. v. Mendoza, 341 F.3d 687 (8th Cir. 2003).
8th Circuit holds that objections were not sufficiently specific to preclude reliance on PSR. (431) The evidence presented at sentencing alone was not sufficient to support a managerial role increase under § 3B1.1(c). However, the PSR cited evidence that defendant exercised decision-making authority over another conspirator, directed the amount of drugs sold, and had drug proceeds turned over to him. In general, a PSR is not evidence and is not a legally sufficient basis for making findings on contested issues of material fact. However, defendant did not object specifically to the PSR’s findings that he was a manager, nor did he object to those portions of the PSR that outlined the evidence that formed the basis for his sentence enhancement. He did, however, object to the conclusion in the PSR that he was ineligible for safety valve relief. Defendant asserted that this general objection served as an objection to all of the underlying criteria for safety valve relief, including the issue of managerial role. However, defendant’s managerial role was not the only basis for denying safety valve relief, and the Eighth Circuit concluded that defendant’s objection was not sufficiently specific to preclude the court’s reliance on the PSR. Defendant’s attorney was given numerous opportunities to contest the managerial role criterion, but did not do so. The unobjected-to portions of the PSR contained sufficient facts from which the district court could conclude that defendant met the criterion for a managerial role adjustment. U.S. v. Quintana, 340 F.3d 700 (8th Cir. 2003).
8th Circuit upholds leadership increase where subordinate made drug deliveries for defendant. (431) Defendant exerted control over a stash house and was associated with Barrios. Ramirez testified that he thought that defendant was in charge because “all [he] had to do is just tell [defendant] what [he] need[ed], then [defendant] made a phone call, and there you go.” Ramirez also testified that he had ordered one pound of methamphetamine from defendant, as well as marijuana, which Barrios had delivered to him. Ramirez also stated that Barrios routinely made drug deliveries for defendant. At the time of trial, Ramirez still owed defendant about $32,000 for the marijuana, indicating that defendant managed the conspiracy’s finances. In light of this evidence, the Eighth Circuit found no clear error in the district court’s finding that defendant was an organizer or leader under § 3B1.1(c). U.S. v. Leonos-Marquez, 323 F.3d 679 (8th Cir. 2003).
8th Circuit says findings were sufficient to support leadership increase. (431) Defendant pled guilty to drug conspiracy charges. He argued on appeal that the sentencing court failed to make adequate findings to support a four level-leadership enhancement. The Eighth Circuit disagreed. A specific finding that the conspiracy involved “five or more participants or was otherwise extensive” was unnecessary because defendant conceded at his change of plea hearing that he was part of a conspiracy that involved himself, at least two other people in Amarillo, Texas, and at least two people in Kansas City, Missouri. Moreover, at his change of plea hearing, defendant acknowledged that he “made arrangements” with at least four other people to transport drugs from Amarillo to Kansas City, that more than one trip was involved, and that this group transported more than 500 grams of methamphetamine and more than five kilograms of cocaine. Defendant also agreed that he “coordinated” these “arrangements” and traveled from Amarillo to Kansas City to “monitor” the shipments. In addition, at sentencing a detective testified that the four individuals who defendant admitted were part of the conspiracy took orders from defendant, as did several others. This was sufficient to support the leadership increase. U.S. v. Antillon-Castillo, 319 F.3d 1058 (8th Cir. 2003).
8th Circuit affirms departure for defendant who controlled assets of money laundering scheme. (431) Defendant, the owner of a bar, helped Godfrey, a customer who had embezzled money from local college and deposited the checks into a bank account. Godfrey needed a way to withdraw the cash without triggering federal reporting requirements. Over a several-year period, Godfrey wrote more than 60 checks to the bar. Defendant added the checks them to the day’s receipts for the bar. Defendant then delivered cash to Godfrey, keeping a percentage for himself. Defendant could not receive a § 3B1.1 organizer enhancement because he did not exercise control over another person. However, the district court departed upward under note 2 to § 3B1.1, which provides that a departure may be warranted for a defendant who did not organize another participant, but who nevertheless exercised management responsibility over the property, assets, or activities of a criminal organization. Defendant argued that this was improper because his offense did not involve any management of property other than that inherent in the offense of money laundering. The Eighth Circuit affirmed the departure. Defendant decided when and in what amounts to withdraw the money from the bank, and even to some extent decided what amount he would keep. The extent of defendant’s control over the assets was shown by Godfrey’s testimony that defendant kept an accounting of their transactions, whereas Godfrey did not. Exercise of such discretion is not inherent in the offense of money laundering. U.S. v. Lalley, 317 F.3d 875 (8th Cir. 2003).
8th Circuit applies organizer increase where defendant recruited acquaintance to accept counterfeit bills. (431) Defendant was convicted of possessing counterfeit currency, in violation of 18 U.S.C. § 472. Based on defendant’s involvement with Johnson, a retail store employee who allowed defendant to pass counterfeit bills at his checkout station, the district court applied a organizer increase under § 3B1.1(c). Defendant argued that he did no more than procure Johnson’s “passive acquiescence” in the wrongdoing and did not sufficiently control Johnson to warrant the organizer enhancement. The Eighth Circuit affirmed the increase. Even if defendant did not control Johnson’s actions in accepting the counterfeit bills, the increase does not require proof of control “so long as the criminal activity involves more than one participant and the defendant played a coordinating or organizing role.” Here, defendant recruited Johnson’s assistance in advance and then compensated Johnson after he accepted the counterfeit bills. The district court did not clearly err in finding that defendant’s involvement with Johnson warranted the organizer increase. U.S. v. Brown, 315 F.3d 929 (8th Cir. 2003).
8th Circuit upholds organizer enhancement based on detectives’ observations and cellmate’s testimony. (431) Defendant and Clark, passengers on a bus from California to South Carolina, were arrested during a layover in Kansas City after police found three kilograms of cocaine in defendant’s bag. At trial, detectives testified that defendant seemed to be the leader when he and Clark were questioned and then detained at the bus station. This testimony was corroborated by defendant’s cellmate, who testified that defendant said he organized numerous trips to carry drugs from California to South Carolina and paid operatives such as Clark to serve in supporting roles. On this record, the Eighth Circuit held that the district court’s finding that defendant was an organizer or leader of the criminal activity was not clearly erroneous. U.S. v. Brown, 311 F.3d 886 (8th Cir. 2002).
8th Circuit applies leadership increase to defendant who brokered agreement to produce meth. (431) When defendant learned that fellow inmate Carver was skilled in manufacturing methamphetamine, defendant arranged for Stoltz to pay for Carver to move to Minnesota upon Carver’s release from prison. Stoltz provided Carver a residence and vehicle, and Carver manufactured meth, and the three men shared the proceeds. The Eighth Circuit upheld a § 3B1.1(a) leadership increase for defendant. He organized the conspiracy and “was the lever which set it into motion.” Defendant recruited both Carver and Stoltz, arranged for Carver to move to Minnesota, and brokered the agreement to manufacture meth and share the proceeds. Later, defendant provided Carver and Stoltz with the recipe for a more efficient method of meth production. He also claimed he was entitled to 30 percent of the proceeds generated by the enterprise. Defendant need not have exercised direct influence or control over his co-conspirators in order to be a organizer or leader under § 3B1.1. U.S. v. Zimmer, 299 F.3d 710 (8th Cir. 2002).
8th Circuit agrees that defendant was manager of meth conspiracy. (431) It was undisputed that the drug conspiracy involved more than five persons, and defendant could not seriously dispute that he exercised managerial or supervisorial authority over at least one other co-conspirator. On 30 to 36 occasions, defendant directed the activity of co-conspirator May when May assisted defendant in cooking methamphetamine. Defendant directed Sandberg in the procurement of a significant amount of ephedrine pills to make methamphetamine. Defendant taught Chandler how to extract ephedrine from the precursor drugs and how to set up a meth lab. Defendant even created a videotape instructing others how to manufacture meth. Accordingly, the Eighth Circuit found sufficient evidence supporting a § 3B1.1(b) increase. U.S. v. Zimmer, 299 F.3d 710 (8th Cir. 2002).
8th Circuit upholds increase for supervisory role in methamphetamine conspiracy. (431) Defendant was involved in a conspiracy to distribute methamphetamine and engage in money laundering. The Eighth Circuit affirmed a three-level increase under § 3B1.1(b) for his supervisory role in the offense. The uncontested evidence showed there were at least eight others involved in the conspiracy. Defendant recruited co-conspirators, solicited others to assist in financing the sale and distribution of the drugs, explained to transporters how to carry the meth on their bodies, asked others to buy hand cleaner for him to use in packing the meth for shipment, encouraged co-conspirators to use false names and addresses when wiring money, and asked others to obtain ingredients to make methamphetamine. Defendant did not show that the enhancement for his supervisory or managerial role in the offense was clearly erroneous. U.S. v. Gelinas, 299 F.3d 978 (8th Cir. 2002).
8th Circuit rejects two-level role increase where offense involved at least five participants. (431) The district court rejected the PSR’s recommendation for a four-level enhancement under § 3B1.1(a) for defendant’s role in the offense, instead applying a two-level increase under § 3B1.1(c). The court explained that the two-level increase resulted in a sentencing range 62 months lower than if defendant were sentenced as an organizer under § 3B1.1(a). The court stated: “I hate to give him another five years for that…. And we’re talking now about 20 years from now let’s give him another five because he was an organizer…. I think it is all kind of ridiculous….” The Eighth Circuit reversed, holding that the district court erred in applying § 3B1.1(c) when the evidence supported a greater increase. The evidence related to defendant’s role in the conspiracy clearly supported the court’s finding that he was at least a supervisor. There was ample unchallenged evidence in the PSR and at sentencing that at least five persons were criminally responsible for the scheme of drug distribution. The evidence that defendant played an aggravating role was very strong, and once the court made such a finding it could not choose to disregard the evidence that there were five or more participants or an otherwise extensive scheme. U.S. v. Vasquez-Rubio, 296 F.3d 726 (8th Cir. 2002).
8th Circuit affirms defendant’s leadership role in cash-checking scheme. (431) The district court found that defendant was a leader or organizer of five or more individuals in a cash checking scheme. The Eighth Circuit found no clear error. Two individuals testified at sentencing as to defendant’s role in the offense. Jones testified that she received and cashed checks for defendant. She also testified as to the involvement of several others. Much of this testimony was corroborated by Agent Rizi, who interviewed various individuals involved in the offense. By defendant’s own admission, he was responsible for the actions of two others, and Jones and Rizi testified to at least four other individuals’ involvement in the scheme. U.S. v. Tucker, 286 F.3d 505 (8th Cir. 2002).
8th Circuit holds that defendant held aggravating role in prostitution ring. (431) Defendant was convicted of being part of an extensive interstate conspiracy involving the recruitment, transportation, control and abuse of prostitutes. One of the prostitutes testified that, following the arrest of Wilson on state charges of prostitution, she witnessed a meeting involving defendant and the other defendants concerning a police statement that Wilson had made implicating the defendants. Another prostitute testified that she wired proceeds from prostitution for defendant on many occasions. She also testified that defendant instructed her to drive Garcia, one of the other prostitutes, on prostitution calls, and Richardson testified that defendant hired her to drive May on prostitution calls. The Eighth Circuit found that this testimony satisfied the requirement that defendant be “the organizer, leader, manager, or supervisor of one or more other participants.” § 3B1.1. U.S. v. Evans, 285 F.3d 664 (8th Cir. 2002).
8th Circuit holds that defendant was organizer or leader of Ponzi scheme. (431) Defendant and others operated a Ponzi scheme through which investors lost over $11 million. The PSR stated that defendant was responsible for at least ten different individuals who helped further the fraud scheme. The evidence at trial showed defendant was the “guru” of the program and pulled all the parties together. Moreover, defendant’s conviction under the continuing financial crimes enterprise, 18 U.S.C. § 225, required proof beyond a reasonable doubt that he managed, supervised, or organized at least four other people. Thus, the Eighth Circuit ruled that the district court did not commit clear error in finding that defendant was an organizer or leader of criminal activity involving five or more participants, including himself. U.S. v. Gravatt, 280 F.3d 1189 (8th Cir. 2002).
8th Circuit says defendant was leader or organizer of otherwise extensive drug ring. (431) In applying a § 3B1.1(a) leadership increase, the district court found that defendant “recruited and controlled at least one individual, that is the person who transported the drugs for him from California to Minnesota in early August.” A cooperating witness testified that the car carrying drugs was driven by an older woman and members of defendant’s family. Further, the record showed that defendant traveled to California to meet with drug suppliers and arrange for drug shipments. Defendant decided what drugs to bring to Minnesota, when to bring them, and how to transport the drugs. Defendant directed the driver of the drug car of the route the car was to travel as well as the efforts to avoid police detection. Additionally, defendant fronted drugs to the government’s cooperating witness and enlisted the help of others in furtherance of his drug activity. The Eighth Circuit ruled that the record supported the district court’s finding that defendant was the organizer or leader of a criminal activity that was otherwise extensive. U.S. v. Sarabia-Martinez, 276 F.3d 447 (8th Cir. 2002).
8th Circuit finds defendant was leader of five or more participants in prostitution ring. (431) The district court increased defendant’s offense level by four levels under § 3B1.1(a) for being a leader of a criminal activity involving five or more participants. The Eighth Circuit agreed that all five defendants were part of a criminal activity involving interstate transportation for prostitution. As for defendant’s leadership, the evidence indicated his participation in an important meeting of the ring leaders. Moreover, he hired a driver to take one of the prostitutes on prostitution calls, thereby satisfying the requirement that he be “the organizer, leader, manager, or supervisor of one or more other participants.” Although the driver worked in that capacity for less than a week, there was no plain error. See U.S. v. Jarrett, 956 F.2d 864, 868 (8th Cir. 1992) (holding that under an earlier version of the guidelines, § 2G1.1 prevented prostitutes from being considered “participants” under § 3B1.1 unless they assisted in the unlawful transportation of others). U.S. v. Evans, 272 F.3d 1069 (8th Cir. 2001).
8th Circuit agrees that defendant who founded drug sale location and recruited others held managerial role. (431) The Eighth Circuit found the evidence of defendant’s involvement in a drug distribution operation sufficient to support a sentence increase for his role as a manager or supervisor under § 3B1.1(b). Defendant played a significant role in the offense by establishing the North Grand location and by recruiting others to operate that location. Frazier, the leader, mixed and packaged the heroin at that location and only defendant and Frazier had access to the supply of heroin stored there. Further, three co-conspirators testified at trial that defendant was in charge of the North Grand operation. U.S. v. Frazier, 280 F.3d 835 (8th Cir. 2001).
8th Circuit upholds leadership increase in drug conspiracy. (431) The Eighth Circuit ruled that the district court’s decision to impose a § 3B1.1(c) leadership increase was not clearly erroneous. Defendant asked his co-conspirator, Alconini, to rent a house for him. Defendant also instructed Alconini to rent a car for him to travel to Nebraska to collect a drug debt. Defendant was the brother of the head of the conspiracy, and was the one who brought the drugs into the rented house even though he had told Alconini that no drugs would be there. U.S. v. Encee, 256 F.3d 852 (8th Cir. 2001).
8th Circuit holds that managerial increase supported by the evidence. (431) Defendant was convicted of wire fraud and securities fraud. The district court applied a § 3B1.1 managerial role enhancement, finding that defendant “gave direction to and approved conduct by Michael Wilcox that constituted part of the scheme to defraud.” The court also found that defendant “supervised Kristen Wakefield’s involvement in engaging in a financial transaction in criminally derived property by having the $15,000 wire-transferred to him in care of her ex-husband, Lawrence Wakefield.” The Eighth Circuit affirmed the increase, ruling that these findings were not clearly erroneous. Wilcox testified that defendant asked him to delay issuing financial statements to the shareholders in 1994 until after the tender offer was completed. He also testified that he wired money to Wakefield at defendant’s direction. Defendant testified before the SEC that Wakefield received money that was intended for him and that she used it to pay current expenses and to reimburse herself for past expenses incurred on defendant’s behalf. U.S. v. Hetherington, 256 F.3d 788 (8th Cir. 2001).
8th Circuit upholds only two-level increase where no finding that operation involved five participants. (431) Defendant argued that the court erred in determining that he had a leadership role in the offense, and in applying a two-level enhancement under § 3B1.1(c). The Eighth Circuit affirmed. Two co-defendants testified extensively regarding defendant’s influential role in the Oak Street Posse. The appellate court would not question the district court’s assessment of their credibility. Defendant’s only witnesses were properly discounted after they refused to submit to cross-examination. The government contended that a three-level increase under § 3B1.1(c) should have been applied because there were more than five members of the Oak Street Posse. However, because the district court did not make a finding that the criminal operation involved more than five other individuals, the court properly applied only a two-level enhancement. U.S. v. Austin, 255 F.3d 593 (8th Cir. 2001).
8th Circuit upholds leadership increase even if another conspirator held leadership role. (431) Nine of the 12 participants in the methamphetamine organization testified against defendant at trial. They stated that defendant directed where the meth would be cooked, paid the property owners in meth in return for the use of their property, directed and financed the purchase of ingredients necessary for cooking the meth, directed participants to steal anhydrous ammonia, and fronted meth for resale by others. Defendant argued that Moore was the leader, and he did not deserve a four-level leadership increase under § 3B1.1(a). Given the overwhelming evidence, and even assuming that Moore also functioned as a leader, the Eighth Circuit ruled that the district court did not clearly err by applying the leadership increase. U.S. v. Lashley, 251 F.3d 706 (8th Cir. 2001).
8th Circuit says guidelines do not allow compromise increase if crime involved five participants. (431) Defendant stipulated in his plea agreement that he played a leadership role in a conspiracy comprised of five or more participants. The district court found that defendant was a manager or supervisor of the conspiracy and imposed a three-level increase under § 3B1.1(b). On appeal, defendant argued that he was merely a low-level manager and therefore deserved only a two-level adjustment. The Eighth Circuit ruled that the guidelines do not authorize such a compromise adjustment. If the criminal activity involved five or more participants, as defendant stipulated, § 3B1.1 permits either a four-level adjustment, a three-level adjustment, or no adjustment. The evidence supported the increase. The lead FBI investigator testified at sentencing that defendant was “clearly the leader of the [gang] in Minnesota. He was running all the narcotics activities of the gang in Minnesota, he set prices for narcotics and directed the actions of numerous individuals in the conspiracy.” This testimony was based on numerous intercepted telephone conversations and the investigator’s extensive interviews with other conspirator. The testimony was corroborated by the testimony of a co-conspirator. U.S. v. Scott, 243 F.3d 1103 (8th Cir. 2001).
8th Circuit refuses to consider challenge to leadership finding where defendant conceded issue at sentencing. (431) At sentencing, defendant conceded that a § 3B1.1(a) leadership increase was proper if the district court found that the scheme was “otherwise extensive.” Thus, defendant did not base his objection to the § 3B1.1(a)(1) increase on the court’s finding that he was a leader or organizer. Therefore, the Eighth Circuit refused to reach the merits of defendant’s claim that he was not a leader or organizer because it was raised for the first time on appeal. U.S. v. Howard, 235 F.3d 366 (8th Cir. 2000).
8th Circuit holds that defendant held leadership or organizer role in investment fraud scheme. (431) Defendant and a co-conspirator were involved in two investment fraud schemes. The Eighth Circuit found sufficient evidence to support a organizer or leadership increase under § 3B1.1(a). Defendant had a controlling role in the acquisition of funds for the investments. He solicited investments from several individuals, and entered into an agreement with another investment entity that led to another investment. Defendant had decision-making authority and a “close link” to the scheme’s source. He provided information on the source of the investment for the investment firm’s marketing brochures, opened an account with the investment firm, and directed investors to deposit money into the account. He also represented to various investors that he had the relationship with the issuing insurance companies necessary to purchase the investments. U.S. v. Howard, 235 F.3d 366 (8th Cir. 2000).
8th Circuit applies leadership increase based on defendant’s deposition testimony about other’s involvement. (431) Defendant submitted two fraudulent credit applications under two different names with a jewelry store. Through the fraudulent accounts, either defendant or an agent made eight separate purchases of jewelry with a total value of $109,180. The district court found that he was a leader or manager of the criminal activity, based on defendant’s deposition in which he claimed an agent had ordered some of the jewelry and that someone else was storing the goods for him. The Eighth Circuit held that the district court did not clearly err in crediting defendant’s own deposition testimony that an agent placed some of the jewelry orders and that someone else was holding the goods for him. U.S. v. Lim, 235 F.3d 382 (8th Cir. 2000).
8th Circuit agrees defendant was leader/ organizer rather than manager/ supervisor. (431) Although defendant argued that he was only a manager or supervisor of a drug distribution conspiracy, the Eighth Circuit found that the district court’s characterization of defendant as a leader or organizer was permissible. A defendant need only be “an” organizer or leader; there can be more than one. Also, a defendant need not have organized or led all of the other participants in the activity. Here, defendant was a distributor of meth. He re-sold it to at least two smaller traffickers. He controlled or at least influenced the actions of his wife and sister. He admitted that he had directed both his sister and his wife to distribute drugs to customers. While defendant was in Mexico, his wife continued to make deliveries and collect money for him. His sister stored drugs, money, and a gun for him. Both his wife and sister were average participants in the conspiracy. Defendant was more than a mere distributor. He actively promoted the shipments from California and led or organized at least two family members. U.S. v. Bahena, 223 F.3d 797 (8th Cir. 2000).
8th Circuit finds that defendant who supervised others was leader or organizer. (431) Defendant claimed he was a mere courier and thus did not deserve any role in the offense increase. However, the Eighth Circuit affirmed a four-level increase under § 3B1.1(a), finding ample evidence that defendant supervised the activities of two conspirators. In addition, he threatened to kill two others if they could not show that they had not stolen drugs belonging to defendant. Finally, defendant supervised the conduct of his nephew. The district court did not clearly err in finding that defendant was a leader or organizer. U.S. v. Bahena, 223 F.3d 797 (8th Cir. 2000).
8th Circuit says defendant who had others selling drugs for him was leader. (431) Defendant was convicted of drug conspiracy charges. The district court found that five people were involved in the conspiracy with defendant. At least four people sold drugs for defendant. Three people assisted defendant in obtaining drugs from sources in Chicago. Defendant set the prices for the crack and tried to control and create territories for the sale of drugs in town. He also attempted to recruit new members into the conspiracy. Based on this evidence, the Eighth Circuit upheld the court’s finding that defendant was a leader in the conspiracy. U.S. v. Womack, 191 F.3d 879 (8th Cir. 1999).
8th Circuit rules that defendant held leadership or organizer role in drug conspiracy. (431) Defendant played a key role both in channeling vast quantities of drugs into Kansas City and in distributing those drugs to dealers within the city. Defendant traveled to Texas to recruit a supplier, regularly organized the transport of large drug shipments from Texas, and often received and stored such shipments. To facilitate the distribution of drugs in Kansas City, defendant provided drugs to dealers on credit so that they could sell without first buying the drugs themselves, recruited at least one person to deliver cocaine to those dealers, and controlled the price of the drugs he sold. In light of this evidence, the Eighth Circuit found no clear error in the district court’s finding that defendant was an organizer or leader of the conspiracy. U.S. v. Thompson, 210 F.3d 855 (8th Cir. 2000).
8th Circuit applies increase where defendant directed others where to buy drugs after his arrest. (431) Defendant admitted at sentencing that he paid one of his customers to drive him around so he could distribute drugs, and defendant’s former girlfriend testified that defendant directed her and another individual to buy drugs from defendant’s supplier after defendant was arrested. Accordingly, the Eighth Circuit ruled that there was sufficient evidence to support a § 3B1.1 managerial role increase. U.S. v. Hyatt, 207 F.3d 1036 (8th Cir. 2000).
8th Circuit holds that defendant was leader of embezzlement scheme. (431) Defendant and his wife owned and operated CFS, a company that provided payroll services to employers. CFS received tax monies its clients were required by law to withhold from the employees’ pay. CFS then prepared and filed their clients’ quarterly federal tax returns with the IRS. When the company began to experience financial problems, defendants used impounded tax funds to cover CFS’s operating expenses, resulting in a shortfall when it was time to pay the IRS. The Eighth Circuit agreed that defendant held a leadership role in the operation. The district court found defendant was “fully in charge” and was “running this operation, and it operated according to [his] will and to [his] whim.” There was no clear error. U.S. v. Ervasti, 201 F.3d 1029 (8th Cir. 2000).
8th Circuit denies minor role reduction to getaway driver. (431) On two occasions, defendant acted as the getaway driver while co-defendant Torres robbed a bank. Defendant’s role was to drive Torres to and from the bank, and defendant got a share of the proceeds. The Eighth Circuit held that defendant was not entitled to a minor role reduction, even though he was less culpable than Torres. There was a third participant, Baker, who was significantly less to blame than either defendant or Torres. Baker helped Torres steal the car that was involved in the second robbery, and she shared in the proceeds of the second robbery. Defendant shared in the proceeds of both robberies, and his share in the first robbery was equal to the amount that Torres kept for himself. Thus, there were three participants, and defendant’s culpability fell within the middle of the three. U.S. v. Christmann, 193 F.3d 1023 (8th Cir. 1999).
8th Circuit rules defendant was leader in cross burning conspiracy. (431) Defendant and his brother were convicted of conspiring to violate civil rights based on their participation in a cross burning in the front yard of a local family. The Eighth Circuit affirmed a § 3B1.1(a) leadership enhancement based on evidence that defendant built the cross, led the meeting of the conspirators at the fire station shortly before the cross burning, and actually burned the cross in the family’s yard. It was undisputed that the criminal activity involved at least five participants. U.S. v. Pospisil, 186 F.3d 1023 (8th Cir. 1999).
8th Circuit upholds defendant’s managerial role in meth conspiracy. (431) Defendant distributed methamphetamine. The Eighth Circuit found ample evidence that defendant was a manager or supervisor in the drug conspiracy. For example, Mask and Fairbanks testified that defendant provided them with controlled substances for resale. Mask further testified that defendant set the price for the drugs, and that defendant received the proceeds from Mask’s drug sales. Fairbanks testified that defendant supplied him with methamphetamine and a digital scale. Finally, Christian testified that he assisted defendant in collecting money from Mask’s customers. U.S. v. Guel, 184 F.3d 918 (8th Cir. 1999).
8th Circuit holds that fraud scheme involved five participants. (431) From 1984 to 1997, defendant participated in a fraudulent investment scheme. The Eighth Circuit held that the fraud involved at least five participants or was “otherwise extensive” for purposes of a four-level § 3B1.1(a) leadership enhancement. The district court specifically identified four people who appeared to be participants for purposes of § 3B1.1(a) and noted that other “con men” were brought in to give legitimacy to the business. The court also found that the $5.8 million, 13-year scheme was otherwise extensive, pointing out that a number of other people had been used, “wittingly or unwittingly, to make this work.” U.S. v. Brockman, 183 F.3d 891 (8th Cir. 1999).
8th Circuit rules defendant who controlled drug supply and recruited co-conspirator was leader. (431) Defendant sold drugs from his clothing store with the help of a co-conspirator. At trial the government introduced evidence that defendant recruited the co-conspirator, who was in high school, by taking her out, buying her gifts, and eventually convincing her to hold drugs and conduct transactions for him. The Eighth Circuit upheld a § 3B1.1(c) leadership enhancement. Defendant controlled the supply of cocaine and told the confidential informant that he would be receiving a large shipment soon. In addition, defendant arranged the sale to the informant and received $550 in payment, of which he kept $500 for himself. Furthermore, defendant recruited the co-conspirator to deliver cocaine base to the informant. U.S. v. Pitts, 173 F.3d 677 (8th Cir. 1999).
8th Circuit upholds three-level managerial role increase where defendant controlled one conspirator. (431) Defendant conspired with members of his family and others to distribute cocaine base and other illegal drugs. At sentencing, an FBI agent testified that defendant controlled his sister and Brooks when they assisted defendant in the distribution of marijuana. Defendant testified in rebuttal, denying any connection with Brooks but admitting he gave his sister drugs and “supervised or assisted” her in selling drugs. The Eighth Circuit held that this evidence supported a § 3B1.1(b) managerial role increase. Defendant did not dispute that the conspiracy had many participants. He exercised enough control over at least one other conspirator to warrant the increase. U.S. v. Barrett, 173 F.3d 682 (8th Cir. 1999).
8th Circuit upholds enhancement for leadership role in cocaine conspiracy. (431) Defendant and his brother were central figures in a conspiracy to distribute crack cocaine. The Eighth Circuit affirmed a four-level leadership enhancement. More than five people testified that they were involved in the conspiracy. The district court found that defendant was the “CEO” of the operation, and he directed the crack selling activities of four conspirators, directed the kidnapping and sexual assault of one conspirator because of a cocaine debt, packaged and cooked crack, and had others cook and test crack for him. These findings were based on testimony at trial and the sentencing hearing and were not clearly erroneous. U.S. v. Johnson, 169 F.3d 1092 (8th Cir. 1999).
8th Circuit finds sufficient evidence to support three-level managerial enhancement. (431) Defendant argued that a three-level managerial enhancement under § 3B1.1(b) was not justified because the only evidence to support it was that defendant fronted drugs to others. The Eighth Circuit found sufficient evidence to support the enhancement. The government presented evidence that five other men were involved in the drug conspiracy with defendant and that he specifically gave instructions to three of them regarding transporting, purchasing and/or selling controlled substances. He also ordered one conspirator to tell authorities that he owned the drugs seized in January 1996 search of another house. U.S. v. Cooper, 168 F.3d 336 (8th Cir. 1999).
8th Circuit affirms managerial enhancement and denies minor role reduction for supervising one participant. (431) Defendant argued that the district court erred when it enhanced her sentence under § 3B1.1 for being a manager or supervisor of a drug conspiracy, and that, in fact, she should have received a minor role reduction under § 3B1.2. The Eighth Circuit disagreed with both points. First, a defendant need only supervise one or more other participants to be subject to a managerial enhancement. The enhancement may apply even if the management activity was limited to a single transaction. In this case, there was direct testimony from one conspirator that she got instructions from defendant. Defendant was not a minor participant. There was ample evidence that defendant was involved in the conspiracy to transport cocaine from California and to deliver money to California from St. Louis, and that she managed or supervised at least one other participant. Defendant may not have been among the most culpable in the conspiracy, but the district court did not clearly err in finding that she was not entitled to a minor participant reduction. U.S. v. Garrison, 168 F.3d 1089 (8th Cir. 1999).
8th Circuit affirms managerial enhancement based on control of subordinate. (431) Defendant pled guilty to one count of conspiracy to distribute and possess cocaine base. The Eighth Circuit upheld a three-level managerial enhancement based on evidence that defendant exercised significant control over a conspirator named Rodrigo. Defendant recruited Rodrigo to sell crack cocaine, make deliveries and collect money in exchange for financial support from defendant. Defendant determined the price of the crack sold by Rodrigo and instructed him to accept only cash payment for the drugs. Defendant instructed Rodrigo where to sell the drugs, to whom he should sell them and how to deal with his best customers. Defendant also controlled others by giving them drugs for bringing him customers, by “fronting” them drugs, and by teaching other drug dealers the technique of cooking cocaine into crack. U.S. v. Jasper, 169 F.3d 1109 (8th Cir. 1999).
8th Circuit upholds leadership enhancement where defendant had network of dealers working under him. (431) Defendant was convicted of drug conspiracy charges. The Eighth Circuit affirmed a four-level leadership enhancement based on testimony that defendant had a network of dealers working under him. While not all were working for him at the same time, and some might have been merely buying for themselves, the district court reasonably could have found that at various times during the conspiracy defendant had at least four helpers or underlings and that defendant was their leader. U.S. v. Brown, 156 F.3d 813 (8th Cir. 1998).
8th Circuit affirms role increase even though both defendant and government objected. (431) Defendant was convicted of drug charges. The PSR recommended a § 3B1.1(a) leadership enhancement, but both defendant and the government objected because the government had agreed, as part of the plea agreement, not to seek the enhancement. The district court overruled the objections of both parties and applied the enhancement. Defendant argued that this was an abuse of discretion because the government bears the burden of proof on role enhancements, and the government introduced no evidence to support the enhancement. The Eighth Circuit ruled that the district court properly applied the enhancement based on its independent consideration of the evidence at sentencing. Nothing in the guidelines prevents a court from using its discretion to determine that sufficient evidence exists to support an enhancement when that enhancement is recommended in the PSR. U.S. v. Milton, 153 F.3d 891 (8th Cir. 1998).
8th Circuit upholds leadership role for defendant who organized meetings with co-conspirators. (431) Defendant owned and operated several political consulting firms. She was convicted of bribery, mail fraud and RICO violations based on her involvement in a scheme in which she paid two politicians money in return for their recommending her firm to others. The Eighth Circuit affirmed a four-level enhancement for defendant’s leadership role in the bribery and RICO scheme. Defendant was heavily involved with organizing the schemes alleged in the indictment. She attended and organized several meeting with the politicians, including a meeting with Blue Cross Blue Shield officials to discuss how defendant’s public relations firm might represent them in lobbying the legislature. Although she claimed that a co-conspirator, an experienced politician and lawyer, was in control of the RICO enterprise and at times directed her actions, there can be more than one leader of a criminal conspiracy. U.S. v. Simmons, 154 F.3d 765 (8th Cir. 1998).
8th Circuit upholds managerial role where others participated in kidnapping. (431) Defendant kidnapped the 15-year-old sister of his wife from a small town in Mexico, transported her to another town in Mexico, kept her there for three weeks, and then took her to Nebraska. He argued that a managerial role enhancement was improper because he was the sole participant in the kidnapping. The Eighth Circuit affirmed the § 3B1.1(b) enhancement because there was evidence of other participants in the crime. One of defendant’s brother’s helped defendant to seize the girl in her village, stayed with her when they crossed the border from Mexico to the U.S., and watched her in Nebraska. The brother knew that the girl was being forcibly detained. Others also participated in the kidnapping, including a person who drove the van in which the victim was kidnapped, an individual who served as a “coyote” to bring her across the border, and another brother of defendant and his wife, who watched the girl during the trip. U.S. v. Hernandez-Orozco, 151 F.3d 866 (8th Cir. 1998).
8th Circuit rules defendant had leadership role in counterfeiting operation. (431) Defendant was involved in a ring that distributed a large amount of counterfeit money throughout the Kansas City, Missouri area. He challenged a leadership enhancement, claiming he was merely an employee of the leader and he did what the leader asked him to do. In addition, defendant only received one-third of the proceeds from the sale of the counterfeit money. The Eighth Circuit affirmed the leadership enhancement because defendant exercised decision-making authority over the counterfeiting operation. He made counterfeit money, enforcing quality standards, and shredding money when he felt that it was of low quality, even when other conspirators felt the product was acceptable. U.S. v. Jordan, 150 F.3d 895 (8th Cir. 1998).
8th Circuit finds defendant was leader of crack distribution ring. (431) Defendant was a member of a violent street gang that distributed cocaine. The Eighth Circuit held that defendant deserved a leadership role enhancement. As the author, administrator, and overlord of a sophisticated interstate conspiracy to distribute illegal drugs, defendant was not only eligible for such an increase, he was precisely the sort of “leader” to which the enhancement was intended to apply. U.S. v. Brown, 148 F.3d 1003 (8th Cir. 1998).
8th Circuit agrees that defendant was leader of crack conspiracy. (431) Defendant was a member of a crack cocaine conspiracy. The Eighth Circuit approved a § 3B1.1 leadership enhancement based on testimony that defendant oversaw the whole operation, directed the procurement of drugs, received the proceeds of drugs sales by co-conspirators, recruited one conspirator to sell crack for him, and made another co-conspirator go through defendant before he could make any decisions for the conspirators. U.S. v. Puckett, 147 F.3d 765 (8th Cir. 1998).
8th Circuit approves managerial enhancement for recruiting co-conspirator and fronting drugs. (431) Defendant was involved in a conspiracy to sell large quantities of methamphetamine. He argued that the district court erred in determining that he was a manager or supervisor of the conspiracy because the evidence showed that he only sold drugs to one co-conspirator, who he claimed was the supervisor of the conspiracy. The Eighth Circuit affirmed the enhancement. Defendant recruited the co-conspirator to distribute methamphetamine and he attempted to recruit another man to distribute large quantities of methamphetamine. Defendant also fronted drugs to the co-conspirator, thus assuming a financial risk for some of the drug sales. Most importantly, defendant exercised a great deal of control over this co-conspirator and the sales defendant made to him. Defendant decided where the sales would take place, the price for the methamphetamine, and the method of payment. U.S. v. Loveless, 139 F.3d 587 (8th Cir. 1998).
8th Circuit upholds role increase for setting price and deciding to whom co-conspirator could sell. (431) Defendant pled guilty to crack cocaine conspiracy charges. The Eighth Circuit affirmed a § 3B1.1(b) enhancement for being a manager or a supervisor in criminal activity involving 5 or more participants. The conspiracy clearly involved 5 or more participants, since defendant admitted at his plea hearing that it involved 6 other individuals. Defendant exercised such control over others in the criminal organization to easily qualify as a manager or supervisor. He set the price of the crack sold by one co-conspirator, and also determined to whom this co-conspirator would sell the crack. Defendant was the source of crack for the conspiracy and could therefore control the amount of crack the conspiracy sold. U.S. v. Ayers, 138 F.3d 360 (8th Cir. 1998).
8th Circuit rules defendant had leadership role in methamphetamine conspiracy. (431) Defendant was involved in a conspiracy to manufacture methamphetamine. The Eighth Circuit upheld a § 3B1.1(a) leadership enhancement based on his decision-making authority over the procurement of equipment, supplies and chemical ingredients. U.S. v. Coleman, 148 F.3d 897 (8th Cir. 1998).
8th Circuit holds that defendant had leadership role in attack on former girlfriend. (431) Defendant and a friend forced their way into the house of defendant’s ex-girlfriend. Defendant punched her and threatened to kill her children. He ordered his friend to grab the victim and they then dragged her out of the house, punching her as they went. They got into defendant’s truck, and he told his friend to knock the victim out. They drove her to defendant’s house, where they again threatened and beat her. When the victim expressed concern about her children, defendant ordered his friend to go get them. The friend returned with the children and left again when defendant instructed him to hide his gun. The victim eventually fled with her children. Defendant and his friend were each convicted of kidnapping, assault, and using a firearm during a crime of violence. The Eighth Circuit affirmed a leadership enhancement based on defendant’s directions to his friend during the crime. For example, defendant repeatedly instructed his friend to punch the victim and directed him to give her his shoes and a coat, to run errands, to pick up her children, and to hide his gun. U.S. v. Van Chase, 137 F.3d 579 (8th Cir. 1998).
8th Circuit upholds leadership role in drug conspiracy. (431) Defendant argued that the district court erred in imposing a leadership enhancement for his role in a methamphetamine conspiracy. The Eighth Circuit affirmed the enhancement based on an undercover cop’s testimony that defendant was “at the top with individuals underneath that were distributing methamphetamine.” In particular, the officer noted that defendant “fronted” drugs, maintained control over the proceeds, required distributors to “pair up” for safety, and directed the activities of a “mule.” U.S. v. Bond, 135 F.3d 1247 (8th Cir. 1998).
8th Circuit upholds role increase and rejects § 3E1.1 reduction for minimizing role. (431) Defendant and others were arrested after one of the passengers in their car attempted to pass a counterfeit check. Police found twelve $100 bills in defendant’s pants and seventeen more in his shirt cuff. On the adjacent sidewalk, they found fifteen more counterfeit checks that contained defendant’s fingerprints. They also found a bank brochure with defendant’s fingerprints that listed the bank’s hours and branch locations. Defendant claimed he only joined the conspiracy that day after learning they had already passed three other checks, and that he agreed only to serve as a lookout. The Eighth Circuit upheld a § 3B1.1 leadership enhancement and denied a § 3E1.1 reduction for acceptance of responsibility. Transcripts of defendant’s phone conversations from jail with two co-conspirators showed his leadership role. During the conversations, defendant told the others how to tell their stories to the police to minimize his involvement. He also talked about killing an individual who had not done what he wanted and threatened prosecution witnesses if he ever got out of jail. Both co-conspirators appeared deferential to defendant. Moreover, the checks and proceeds were tied directly to defendant. U.S. v. Ngo, 132 F.3d 1231 (8th Cir. 1997).
8th Circuit rules defendant was leader or organizer of methamphetamine conspiracy. (431) Defendant was involved in a conspiracy to manufacture and distribute methamphetamine from a laboratory on his property. The Eighth Circuit found ample evidence that defendant was a leader and organizer of a drug conspiracy involving five or more people. Defendant directed the distribution scheme. It was defendant’s idea to kill a co-conspirator over a drug debt the co-conspirator owed defendant. Defendant put out the contract on the co-conspirator’s life and induced others to beat him to death. Witnesses also testified that conspirators were dealing firearms under defendant’s direction. Defendant recruited members of the conspiracy and supervised procurement of drug manufacturing materials. There was no question that he was a leader or organizer. U.S. v. Dierling, 131 F.3d 722 (8th Cir. 1997).
8th Circuit finds stipulated facts established managerial role. (431) Defendant objected to the PSR’s characterization of her as a manager in a Medicare fraud conspiracy. The district court did not make written findings regarding these objections, but did find during the sentencing hearing that defendant was a manager. The Eighth Circuit affirmed because the stipulated facts in defendant’s plea agreement supported the managerial enhancement. Defendant stipulated that she was the administrator of the corporation involved, she submitted the fraudulent reports, she submitted false invoices, and she wrote two checks to her nephew, purportedly for computer expenses, which he endorsed and redeposited into the corporation’s checking account. The stipulation demonstrated defendant’s coordinating role in the enterprise. Most telling was defendant’s fraudulent transaction with her nephew, in which, acting as administrator, she attempted to deceive auditors and defraud the Medicare program. Moreover, given her husband’s admittedly minor role, it was highly unlikely that the scheme could have succeeded without defendant’s close supervision. U.S. v. Mayer, 130 F.3d 338 (8th Cir. 1997).
8th Circuit affirms “manager” increase where defendant acted as bank for money and drugs. (431) Defendant challenged a managerial enhancement for her role in a drug conspiracy. She claimed she was little more than a “gofer” who ran errands when directed by her brothers. She denied there were large sums of money or drugs at her house. The Eighth Circuit affirmed the enhancement because defendant was a central figure in the conspiracy who acted as the bank for both the money and the heroin. There was sufficient to evidence that defendant managed and supervised at least one other participant in the conspiracy. Although defendant’s management of assets and activities did not equate with control of participants, it was evidence of her power within the organization. From the combination of autonomy and control over assets, the court could reasonably infer that defendant had the discretion necessary to direct other participants in the conspiracy. She exercised this discretion on several occasions. She determined where certain drug transactions took place, and determined the ownership of money. U.S. v. Padilla-Pena, 129 F.3d 457 (8th Cir. 1997).
8th Circuit upholds § 3B1.1(a) where reference to supervising participants was inadvertent. (431) The district court increased defendant’s offense level by four based on its determination that “the government proved that there were at least six individuals who [defendant] supervised.” The § 3B1.1(a) four level enhancement only applies if the defendant was a leader or organizer, rather than a supervisor, of criminal activity involving five or more participants. The Eighth Circuit upheld the enhancement despite the court’s use of the word “supervised” rather than “led.” The district court’s reference to defendant’s supervisory role was an inadvertent error and did not reflect the mistaken view that a supervisor who supervises six persons in a criminal enterprise should be given a four level enhancement. The PSR, which the district court followed, recommended a § 3B1.1(a) enhancement because defendant was a “leader” of the criminal enterprise that involved at least 6 people. The court meant to say that defendant was a leader who supervised 6 persons. U.S. v. Sobrilski, 127 F.3d 669 (8th Cir. 1997).
8th Circuit holds findings were sufficient to support § 3B1.1(a) leadership enhancement. (431) Defendant challenged a § 3B1.1(a) enhancement for being the leader of criminal activity involving five or more participants, contending that the district court’s findings in support of the enhancement were insufficiently specific. The Eighth Circuit held that the lower court’s finding were specific enough to support the § 3B1.1(a) enhancement. At sentencing, the government summarized the relevant testimony of three co-conspirator witnesses. Although defendant challenged this testimony, the district court found it both credible and sufficient to establish that defendant led a drug conspiracy involving six others besides himself. U.S. v. Ortiz, 125 F.3d 630 (8th Cir. 1997).
8th Circuit holds defendant was manager of check counterfeiting ring. (431) Defendant was convicted of conspiring to traffic in counterfeit checks. The leader distributed the counterfeit checks to “drivers” who drove the “passers” to the bank to cash them. After cashing several checks, the “passers” returned to the leader’s apartment, where they received 15% of the proceeds. The leader paid the “drivers” 5%. The Eighth Circuit affirmed a managerial enhancement based on evidence that defendant recruited three “passers,” tried to recruit another, and recruited one “driver.” Defendant never appeared at any bank to cash any checks, but he was always around, and he was always present at the leader’s apartment. The fact that he only received 5% of the proceeds was not inconsistent with a managerial role. The evidence suggested that he received 5% of the total proceeds, whereas the “drivers” and “passers” only received a percentage of what they actually handled. U.S. v. Tran, 122 F.3d 670 (8th Cir. 1997).
8th Circuit finds defendant was leader of attempted murder of undercover agent. (431) Defendant and his brother attempted to kill an undercover agent who was investigating their drug operation. Defendant challenged a § 3B1.1(a) enhancement, claiming that those who aided and abetted him were friends who did so sua sponte and without coordination. The Eighth Circuit affirmed the enhancement because the record was replete with evidence that defendant was the driving force behind the murder attempt. He had the most to gain from it, he recruited the others to assist him, and he organized and directed their every move as they executed the plan he had conceived. U.S. v. Rodgers, 122 F.3d 1129 (8th Cir. 1997).
8th Circuit affirms defendant’s leadership role in motorcycle gang. (431) Defendant was one of many members of a motorcycle gang convicted of RICO and drug charges. The Eighth Circuit affirmed a § 3B1.1 leadership enhancement based on evidence that defendant served as president of a local chapter of the gang, a highly structured and hierarchical organization. Defendant was an upper level distributor of methamphetamine for his subordinates in the local chapter and controlled the supply. U.S. v. Fairchild, 122 F.3d 605 (8th Cir. 1997).
8th Circuit rules defendant was leader or organizer of group that built firebombs. (431) During a night of drinking, defendant told his friends he wanted to “get” a local police officer who had recently arrested one of defendant’s relatives. He directed his friends to obtain certain ingredients, and then showed them how to construct firebombs. After testing the firebombs, defendant instructed two friends to firebomb the officer’s car. The Eighth Circuit affirmed a § 3B1.1(a) enhancement for being the leader or organizer of a criminal enterprise involving five or more participants. The group that made the firebombs and attempted to use them consisted of five members, including defendant. Defendant clearly was the leader or organizer of the group. It was defendant who proposed “getting” the officer, based on defendant’s personal motives, and it was defendant who formulated the plan to construct firebombs to destroy the officer’s car. Defendant did far more than proffer suggestions to friends. He directed them to obtain the ingredients for the firebombs, and the friends obeyed his commands. Defendant also showed his friends how to make the firebombs. U.S. v. Drapeau, 121 F.3d 344 (8th Cir. 1997).
8th Circuit holds defendant need not control five participants to justify role increase. (431) Defendant challenged a § 3B1.1(a) enhancement on the ground that he did not direct five participants in the drug conspiracy. The Eighth Circuit affirmed the enhancement, since the conspiracy involved more than five participants, and defendant admitted controlling at least two of them. The § 3B1.1(a) enhancement applies where the defendant is a leader or organizer of an illegal enterprise that involved five or more participants, even if the defendant’s leadership role did not encompass all the participants. U.S. v. Payne, 119 F.3d 637 (8th Cir. 1997).
8th Circuit holds court’s findings on perjury and role were sufficiently specific. (431) Defendant argued that the court’s findings were inadequate with respect to his role in the offense enhancement and his obstruction of justice enhancement. The Eighth Circuit held that the court’s perjury and role in the offense findings were sufficiently specific. The court stated it was “absolutely convinced” that defendant perjured himself “over and over and over again,” but it did not explicitly list particular statements by defendant that it believed to be false. Although citing such specific instances are preferable, it is enough that the court made an independent and specific finding that the defendant committed perjury. The court also stated that based on all the evidence, it was “firmly convinced” that defendants were leaders of the entire conspiracy. They “put it together, they manipulated it, they implemented it, and they organized numerous other people to participate in the scheme.” U.S. v. Grajales-Montoya, 117 F.3d 356 (8th Cir. 1997).
8th Circuit affirms § 3B1.1(b) increase where defendant had another man deliver drugs for him. (431) A government informant set up a methamphetamine purchase by paging defendant, who instructed the informant that the person delivering the drugs would be wearing a jacket with “Arizona” on it. A person who was not defendant subsequently arrived, wearing the jacket, driving defendant’s car. The Eighth Circuit agreed based on this evidence that defendant managed or supervised at least one other participant in the crime and was therefore a manager or supervisor in a crime involving five or more participants. U.S. v. Rodriguez, 112 F.3d 374 (8th Cir. 1997).
8th Circuit affirms § 3B1.1(a) enhancement for defendant in charge of four drug houses. (431) The Eighth Circuit agreed that defendant was the leader of a drug conspiracy based on evidence that he was in charge of at least four houses where people could order heroin by telephone. At defendant’s direction, runners would then deliver the drugs to the customer at some other place. There were at least two runners at two of the houses and possibly three runners at one house. The five participant requirement does not require five participants under defendant’s direction, but five persons, including defendant, involved in the overall crime, only one of whom must be under defendant’s direction. U.S. v. Rodriguez, 112 F.3d 374 (8th Cir. 1997).
8th Circuit upholds leadership role of methamphetamine manufacturer and supplier. (431) Defendant was the manufacturer and supplier in a conspiracy to distribute methamphetamine. The Eighth Circuit affirmed a leadership role enhancement, agreeing that defendant did more than sell for resale. Defendant exercised control in the resale of the methamphetamine. A distributor testified that defendant was the “main man” or “heavy.” On the day of the buy-bust, defendant accompanied his distributor because he was shepherding the money. U.S. v. Guerra, 113 F.3d 809 (8th Cir. 1997).
8th Circuit affirms leadership enhancement for president of corporation involved in illegal activities. (431) Defendant, the president and majority stockholder of a commercial fossil business, was convicted of two minor counts of theft (for taking fossils from U.S. lands without permission) and two counts of failing to file a customs reports when transporting monetary instruments. The Eighth Circuit affirmed a four level leadership enhancement based on defendant’s role as the head of the business. Judge Beam dissented, since the district court did not name five conspirators, and only defendant and his girlfriend were present for the actual customs violations. U.S. v. Larson, 110 F.3d 620 (8th Cir. 1997).
8th Circuit says defendant conceded there were five participants in seeking only three-level increase. (431) Defendant challenged a § 3B1.1(a) leadership enhancement on the grounds that the criminal activity did not involve five criminally responsible participants. The Eighth Circuit held that defendant waived this argument by asserting in his response to the PSR that he should only receive a three level increase because his two businesses were communal operations in which all participants were fully knowledgeable and responsible. Defendant was arguing that he fell within § 3B1.1(b), which assesses three points for being a manager or supervisor, rather than § 3B1.1(a), which assesses four points for being a leader or organizer. However, both sections require that the criminal activity involve five or more participants or be otherwise extensive. By arguing that he came within § 3B1.1(b), defendant conceded that there were five or more participants. U.S. v. Choate, 101 F.3d 562 (8th Cir. 1996).
8th Circuit refuses to review role increase where overall sentence was a downward departure. (431) Defendant argued that the district court should not have enhanced his sentence for his leadership role in a massive drug trafficking network. The Eighth Circuit held that the issue was not reviewable because defendant’s overall sentence was a downward departure from the sentence that would have resulted if he had prevailed on this point. Defendant’s argument also failed on the merits. Defendant clearly directed or procured the aid of underlings, and was responsible for organizing others to carry out crimes. Defendant himself admitted that he was one of the “big players” in the drug conspiracy. The district court specifically found that defendant had more than a dozen subordinates. U.S. v. Williams, 97 F.3d 240 (8th Cir. 1996).
8th Circuit affirms role enhancement for “key link” between suppliers and distributors. (431) Defendant pled guilty to conspiring to distribute cocaine and cocaine base. The Eighth Circuit affirmed a § 3B1.1(a) enhancement based on evidence that defendant was the “key link” between the suppliers of cocaine in Chicago and his distributors and customers in Cedar Rapids. Defendant maintained control over the drugs and had keys to the shed where the drugs were stored. Defendant also negotiated drug sales, set the price, and had others deliver drugs. At least five people were involved in the criminal activity. Defendant gave a conspirator approval to sell drugs for a certain price to an undercover agent, showing he organized or led the conspirator. The agent’s testimony concerning this was corroborated by his interaction and conversations with defendant and his co-conspirators, and the court could properly rely on reliable hearsay statements. U.S. v. Knight, 96 F.3d 307 (8th Cir. 1996).
8th Circuit bases role increase on co‑defendants’ post‑arrest statements. (431) The Eighth Circuit upheld a supervisory role enhancement based on the co‑defendants’ post-arrest statements. The first co‑defendant stated that he was on a “dope run” for defendant and another man. The second co‑defendant told police that he was transporting drugs for two men, but could not name the men because they would kill him. The identities of the men were clearly implied by the totality of defendant’s statements. It was proper to consider these post‑arrest hearsay statements. Defendant was given a full opportunity to rebut the co‑defendants’ statements at the sentencing proceeding. He did not ask for an evidentiary hearing and said he would not submit any affidavits to rebut the post‑arrest statements. U.S. v. Edwards, 91 F.3d 1101 (8th Cir. 1996).
8th Circuit agrees that defendant managed people selling crack from apartment. (431) Defendant and several others were arrested in an apartment from which crack cocaine was sold. The Eighth Circuit agreed that defendant was a manager or supervisor of the people selling crack from the apartment. Two women who pled guilty to drug charges testified that defendant was the person who decided whether people who came to the apartment door could come into the apartment. One woman testified that defendant appeared to be the “boss” of two women selling crack from the apartment. U.S. v. Brown, 91 F.3d 1109 (8th Cir. 1996).
8th Circuit rules managerial increase was not based solely on buyer‑seller relationship. (431) Defendant entered into a conspiracy with a college student to sell crack cocaine. Defendant claimed he and the student had merely a buyer‑seller relationship which did not provide the basis for a § 3B1.1 enhancement. The Eighth Circuit affirmed the managerial enhancement, finding defendant overstepped the boundaries of a mere seller with the student. Defendant retained the financial risk of distribution by fronting or consigning the drugs. Defendant also supervised the student, telling him what to do when he was short on money. U.S. v. Atkinson, 85 F.3d 376 (8th Cir. 1996).
8th Circuit says increases for leadership and being “in the business” were not double counting. (431) Defendant owned a body shop involved in a conspiracy to steal cars and replace their VINs with numbers from salvage vehicles. He received a § 2B6.1(b)(2) enhancement for being in the business of receiving and selling stolen property and a § 3B1.1(a) enhancement for being a leader or organizer of the criminal activity. The Eighth Circuit held that the “in the business” enhancement and the leadership enhancement did not constitute double counting. Although defendant’s ownership of the body shop facilitated his leadership role in the conspiracy, it did not require such a role. Defendant could have run an illegal re‑tagging operation in which stolen vehicles were received and sold without directing his employees to steal the vehicles that he would later sell. U.S. v. Reeves, 83 F.3d 203 (8th Cir. 1996).
8th Circuit finds sufficient evidence to support managerial enhancement. (431) Defendant was twice convicted of drug charges. The first conviction was reversed because the court improperly admitted an out of court statement of a confederate. After his second conviction, defendant challenged a managerial enhancement, claiming that without this statement there was no evidence that he managed or supervised anyone. The Eighth Circuit disagreed, finding there was substantial testimony in the second trial from the police and DEA agents regarding the actions of both defendant and the confederate which the officers observed. There was also testimony regarding the typical role of drug couriers like the confederate in illegal drug distribution. U.S. v. Hazelett, 80 F.3d 280 (8th Cir. 1996).
8th Circuit holds that “broker” played managerial role in drug conspiracy. (431) Defendant became involved in a large scale drug conspiracy. He was arrested after “brokering” a deal on behalf of the ring. The Eighth Circuit approved a three level § 3B1.1(b) enhancement for defendant’s role in the offense. Defendant solicited a substantial buyer on behalf of the drug ring, helped finance the trip to sell the marijuana, played an integral and extensive role in planning the transaction, determined the price, including arranging for a sizable portion of the drugs to be “fronted,” and personally managed and ensured that the deal was completed. U.S. v. Flores, 73 F.3d 826 (8th Cir. 1996).
8th Circuit approves multiple enhancements. (431) Defendant started a business that purported to provide services to persons seeking commercial financing. She used false documentation and oral misrepresentations to persuade five individuals to wire her a total of $320,000 for investment purposes. The investors never saw their money again, although they sometimes received communications from an associate of defendant’s regarding the status of their investments. At trial, defendant denied making the representations described by the government’s witnesses. She portrayed her role as that of an intermediary between her associate and the investors. She maintained that she had always believed her representations were truthful. The Eighth Circuit upheld enhancements under §2F1.1(b)(2) for a scheme to defraud more than one victim, § 3B1.1(c) for being the organizer or leader of a criminal conspiracy, and § 3C1.1 for obstructing justice by perjuring herself at trial, and denied an acceptance of responsibility reduction. The court’s factual findings were supported by the evidence. U.S. v. Wonderly, 70 F.3d 1020 (8th Cir. 1995).
8th Circuit agrees that defendant directed bankruptcy fraud. (431) After her husband committed bank fraud, defendant and other members of her family helped her husband move to another state and establish a new identity to avoid creditors and police. Defendant also sold or hid many valuable items of personal property from creditors. During a bankruptcy proceeding, she lied to the bankruptcy court about her attempts to hide assets. The Eighth Circuit approved a § 3B1.1(a) enhancement since defendant directed the actions of other family members who participated in the criminal activity. For example, defendant asked her sister to conceal defendant’s husband’s identity after he went into hiding. She also selected items in her home for her sister and brother-in-law to transport out of state, and directed her son to rent storage lockers to hold some of the assets defendant hid from creditors. U.S. v. Cheek, 69 F.3d 231 (8th Cir. 1995).
8th Circuit upholds increase where seven co-conspirators testified defendant was the leader. (431) The Eighth Circuit affirmed a § 3B1.1(a) enhancement in light of undisputed testimony of seven co-conspirators that defendant was the leader of the drug conspiracy, responsible for recruitment of new members, for the distribution, transportation, conversion, repackaging, and resale of drugs, and for securing, maintaining, and fortifying the apartments from which drugs were sold. U.S. v. Jackson, 67 F.3d 1359 (8th Cir. 1995).
8th Circuit counts informant who participated in conspiracy before cooperating with police. (431) Defendant was involved in making three methamphetamine shipments from California to Iowa. The Eighth Circuit agreed that he was a manager of criminal activity involving five or more participants. Defendant supervised the first shipment, controlling one conspirator’s participation and recruiting two others to transport the drugs. There were at least five participants. Although one conspirator was a government informant, before becoming an informant, the conspirator participated in the conspiracy by receiving and distributing the first shipment supplied by defendant. She could be counted because this activity occurred before her cooperation with the police. U.S. v. Pena, 67 F.3d 153 (8th Cir. 1995).
8th Circuit holds that defendant was leader rather than manager of drug conspiracy. (431) Defendant was convicted of drug and money laundering counts. He argued that a cooperating government witness was the leader of the conspiracy and that he was a mere manager or supervisor. The Eighth Circuit found no error in the four-level leadership enhancement under § 3B1.1(a). Defendant was the sole supplier of cocaine and controlled important aspects of the conspiracy including what drugs would be sold, where the drugs would be distributed, what quantity would be distributed, and the price. In three major transactions, North Dakota participants were made to travel to California to meet defendant, and on each occasion he determined where and when the transaction would take place, as well as the quantity of cocaine conveyed. U.S. v. Valencia, 61 F.3d 616 (8th Cir. 1995).
8th Circuit holds that employees who did not benefit from illegal activities and were never charged were participants. (431) Defendant was the sole owner and manager of a company that sold precious metals to individuals. Defendant diverted payments from his clients to order to invest in the commodities market. Two employees routinely assisted defendant in diverting client funds. Defendant challenged a § 3B1.1(c) enhancement on the grounds that he was the only participant in the offense. The Eighth Circuit held that defendant’s employees were participants even though they did not benefit from defendant’s crimes and were not charged or convicted of any criminal activity. The employees qualified as participants because they were criminally responsible for the commission of the offense. They both knowingly and unknowingly aided him in his fraud. They solicited new clients to cover the ongoing commodities market losses and sent fraudulent invoices to existing clients. Defendant’s office manager repeatedly confronted defendant regarding false monthly statements sent to the clients. U.S. v. Braun, 60 F.3d 451 (8th Cir. 1995).
8th Circuit approves managerial enhancement for arranging drug transactions and loaning money. (431) Defendant pled guilty to drug and money laundering charges. The Eighth Circuit upheld a three-level managerial enhancement based on evidence that defendant arranged drug transactions for other members of the conspiracy, introduced his brother to a relative who could supply additional cocaine, and loaned funds to other members of the conspiracy for additional cocaine purchases and for business operations. U.S. v. Skorniak, 59 F.3d 750 (8th Cir. 1995).
8th Circuit finds defendant had aggravating role in scheme to obtain federal funds. (431) Defendant ran a company that assisted school districts in obtaining federal funds for asbestos removal. When he discovered that the funds obtained for one district were substantially in excess of what was needed for the asbestos removal project, he developed a scheme to submit false claims in order to use the additional money for other unrelated renovation projects at the school district. The Eighth Circuit agreed that defendant was an organizer, leader, manager or supervisor of the scheme under § 3B1.1. The operators of the asbestos removal company testified that defendant came up with the plan, recruited them to participate, and continued to provide substantial direction during the life of the plan. Moreover, defendant was responsible for preparing and submitting the forms bearing the false claims. U.S. v. Peters, 59 F.3d 732 (8th Cir. 1995).
8th Circuit upholds role enhancement despite government’s belief that wife was equally involved. (431) Defendant and his wife engaged in an insurance speculation scheme involving the purchase of multiple hospital insurance policies. The Eighth Circuit upheld a supervisory role enhancement under 3B1.1(c) despite the government’s belief that defendant and his wife were equally involved. Defendant clearly was the organizer, supervisor and manager of the fraud scheme. He had previously operated a similar scheme. He applied for and obtained the insurance policies, was the person hospitalized, filed the insurance claims, and received the policy proceeds, which he turned over to his wife. At the sentencing hearing, defendant stated that his wife “did what he ordered her to do.” U.S. v. Rodamaker, 56 F.3d 898 (8th Cir. 1995).
8th Circuit upholds leadership role for major heroin supplier who arranged trips and recruited courier. (431) The district court found that defendant had a leadership role in a heroin distribution ring. The Eighth Circuit affirmed. Defendant was the major supplier for the dealer who ran the distribution ring. Defendant arranged “turn around” trips for the dealer to pick up heroin in Chicago and return to St. Louis, and she allowed the dealer to defer payments until the heroin had been resold. Defendant also recruited her teenage granddaughter to carry heroin from Chicago to St. Louis, and furnished her grandson to be the dealer’s driver when the dealer came to Chicago to buy heroin from defendant. U.S. v. Logan, 54 F.3d 452 (8th Cir. 1995).
8th Circuit upholds §3B1.1(c) enhancement for “lieutenant” in drug business. (431) The district court enhanced defendant’s sentence under § 3B1.1(c), finding he was “a major player” in a drug organization. The Eighth Circuit affirmed, based on evidence that defendant was the leader’s “lieutenant,” who delivered drugs to middlemen, picked up their money, transported marijuana without supervision, made a debt collection call on a middleman who was in jail, and helped break a 100-pound quantity for distribution to other dealers. Defendant held a degree of responsibility in the business that warranted enhancement. U.S. v. Alexander, 53 F.3d 888 (8th Cir. 1995).
8th Circuit upholds leadership enhancement for defendant who controlled drug shipments. (431) The Eighth Circuit upheld defendant’s leadership role in a drug conspiracy based on testimony that defendant decided what quantity of drugs to order, the shipping destination of the drugs, and which individual would serve as a courier for a particular trip. U.S. v. Rice, 49 F.3d 378 (8th Cir. 1995).
8th Circuit approves organizer increase for receiving and organizing drugs for redistribution. (431) Defendant was part of a drug conspiracy that received drugs from California and distributed them in St. Louis. Defendant challenged a § 3B1.1(a) enhancement, claiming that the three people involved in transporting the cocaine from California to St. Louis were the ones in control of the conspiracy. The Eighth Circuit upheld the enhancement based on evidence that defendant was instrumental in receiving and paying for large amounts of cocaine and organizing the drugs for redistribution. A defendant can be a leader or organizer even if he did not directly control others in the conspiracy. Moreover, defendant admitted that he recruited at least seven women to store and deliver drugs for him. U.S. v. Johnson, 47 F.3d 272 (8th Cir. 1995).
8th Circuit requires four level enhancement where conspiracy involved more than five participants. (431) The district court determined that defendant was an organizer of criminal activity within the meaning of § 3B1.1(c), and enhanced his sentence by two levels. The Eighth Circuit held that a four level enhancement was required because the overall conspiracy involved more than five participants. Defendant’s managerial role within the overall conspiracy did not need to involve more than five participants. The guideline clearly states that a finding of significant involvement in a criminal activity involving five or more participants should result in either a three or four level enhancement. The district court did not have discretion to impose only a two level enhancement. U.S. v. Smith, 49 F.3d 362 (8th Cir. 1995).
8th Circuit holds that defendant who had most to gain from insurance fraud was leader. (431) Defendant falsely reported to his insurance company that his truck had been stolen. He then disguised the truck by partially rebuilding it with parts from other trucks that he and others had previously stolen. All of the trucks were recovered by police on the farm of a co-conspirator. The 8th Circuit affirmed a leadership enhancement. Of the three individuals involved, defendant stood to gain the most. He would gain ownership of his truck free from his loan from Ford Motors, a new diesel engine for the truck from a stolen truck, and new trucks for his farming business. Additionally, defendant enlisted two others to assist him in the theft and concealment of the trucks. U.S. v. Ballew, 40 F.3d 936 (8th Cir. 1994).
8th Circuit holds that two defendants were leaders or organizers of bribery scheme. (431) Defendants conspired to bribe an IRS agent in order to avoid business and personal taxes. The 8th Circuit approved § 3B1.1(a) enhancements for being the leader or organizer or criminal activity involving five or more participants. The conspiracy involved more than five people: the two defendants, the other four indicted co-conspirators, and other unindicted co-conspirators. Defendants operated and led the conspiracy. One defendant decided to contact the agent regarding the bribe to fix the taxes and traveled to St. Louis to see the agent face to face in order to decide whether to go through with the bribe. The decision to go ahead rested with both defendants. One defendant wanted to try the bribe in early 1990; the other approved the bribe by April of that year. U.S. v. Dijan, 37 F.3d 398 (8th Cir. 1994).
8th Circuit upholds managerial role enhancement in drug conspiracy. (431) The 8th Circuit found ample evidence to support defendant’s managerial role in a drug conspiracy. There was testimony that defendant handled drug transactions for a co-conspirator, directed and paid another co-conspirator to retrieve crack from some bushes near a residence, orchestrated the shipments of cocaine from California to Omaha, sewed cocaine into a stuffed animal before flying from California to Omaha to deliver the cocaine, and made numerous wire transfers involving large sums of money. U.S. v. McMurray, 34 F.3d 1405 (8th Cir. 1994).
8th Circuit rejects minor role for defendant who located drug source and coordinated meeting. (431) The 8th Circuit held that defendant did not play a minor role in a drug sale to an undercover agent in light of evidence that defendant located the drug source; coordinated the meeting between the source, the sellers and the agent; negotiated the final rendezvous place with the agent; and agreed beforehand on the allocation of profits between himself and the other sellers. U.S. v. Ray, 35 F.3d 354 (8th Cir. 1994).
8th Circuit holds that conspiracy acquittal does not preclude organizer or leadership enhancement. (431) Defendant argued that § 3B1.1(a) did not apply to him because the jury acquitted him of conspiracy charges. The 8th Circuit held that the conspiracy acquittal did not preclude a leadership or organizer enhancement. Although the seven people named in defendant’s PSR were not indicted or tried, they were criminally responsible for defendant’s crime of transporting hazardous waste without a permit. U.S. v. Freeman, 30 F.3d 1040 (8th Cir. 1994).
8th Circuit approves managerial enhancement for defendant who controlled cocaine sales. (431) Defendant argued that she did not exercise sufficient control and authority over her co-conspirators to receive a three level enhancement under § 3B1.1(b). The 8th Circuit disagreed. A co-conspirator’s testimony and some of defendant’s taped admissions showed that defendant exercised control over cocaine sales and negotiated for the purchase of cocaine in Texas. U.S. v. Tangeman, 30 F.3d 950 (8th Cir. 1994).
8th Circuit upholds leadership enhancement for drug source who monitored drug sales. (431) Defendant supplied cocaine to a co-conspirator. The co-conspirator then supplied four others who distributed the cocaine in a housing project. Defendant made phone calls to the co-conspirator to determine whether he had encountered any problems with the distribution. The 8th Circuit found this evidence sufficient to support a leadership or organizer enhancement under § 3B1.1(a). A defendant need not directly control others in the conspiracy to be a leader or organizer. U.S. v. Maxwell, 25 F.3d 1389 (8th Cir. 1994).
8th Circuit holds that defendant who gave approval for drug sales was leader. (431) The 8th Circuit upheld a leadership enhancement under §3B1.1(c): Defendant was observed conducting transactions and expressing her approval when crack cocaine was sold to a confidential informant. She admitted that the drugs and money belonged to her. Also, unidentified persons sold drugs from defendant’s residence. U.S. v. Cotton, 22 F.3d 182 (8th Cir. 1994).
8th Circuit holds that court should have applied § 3B1.1(c) enhancement to leader of bank fraud scheme. (431) Defendant was the CEO and director of a bank. Defendant, her husband and her nephew defrauded the bank by drawing insufficient funds checks on one account and depositing them into another to make it reflect a positive balance, and then issuing cashier’s checks to themselves. The district court refused to apply a leadership enhancement under § 3B1.1(c). The 8th Circuit found this clearly erroneous. Defendant exercised direct control over the operations of the bank, causing subordinate employees to perform acts designed to perpetrate and conceal the fraud. She also recruited her nephew to write the insufficient funds checks and directed him in opening and maintaining an overdrawn account in a bank that she controlled. U.S. v. Morris, 18 F.3d 562 (8th Cir. 1994).
8th Circuit agrees that defendant organized extortion scheme. (431) Defendant, the mayor of a small city, was convicted of attempted extortion. The 8th Circuit upheld a two level enhancement based on defendant’s organizational role in the scheme. The taped conversations showed defendant demanding money from a city contractor. The contractor also testified that another contractor demanded money for defendant. Thus, the district court’s findings that defendant organized the scheme and recruited another contractor to assist him was not erroneous. U.S. v. Clay, 16 F.3d 892 (8th Cir. 1994).
8th Circuit agrees that defendant was supervisor or manager of drug ring. (431) The 8th Circuit found that the evidence supported the finding that defendant was a manager or supervisor of a drug ring. Defendant (1) generally conducted the transactions with the undercover agent for the sale of crack cocaine, (2) attempted to recruit the agent to sell crack for him, (3) was observed in possession of large amounts of currency, (4) on two occasions, was assisted in the sale of crack, and (5) was the principal negotiator for the purchase of a machine gun from the agent. U.S. v. Tran, 16 F.3d 897 (8th Cir. 1994).
8th Circuit requires three or four level enhancement for more than five participants. (431) The government contended that defendant should have received a three level enhancement based on defendant’s aggravating role in the offense, rather than a two level enhancement, because the criminal activity involved five or more participants. The 8th Circuit agreed that since it was undisputed that five or more participants were involved, and that defendant held an aggravating role in the offense, the district court had the option under section 3B1.1 of enhancing defendant’s sentence by either three or four levels, but not by two levels. The guidelines consider any criminal activity involving five or more participants to be extensive as a matter of law. U.S. v. Kirkeby, 11 F.3d 777 (8th Cir. 1993).
8th Circuit holds leadership enhancement was not double counting in gambling business. (431) Defendant argued that an enhancement under section 3B1.1(a) for being the leader of a criminal activity involving five or more participants was double counting, since five or more participants was an essential element of illegal gambling business conviction. The 8th Circuit rejected this argument. The section 3B1.1 enhancement was because defendant was a leader of criminal activity involving five or more participants, not because the organization contained five or more participants. U.S. v. Trupiano, 11 F.3d 769 (8th Cir. 1993).
8th Circuit says role guideline allows court to examine “contours of underlying scheme.” (431) Defendant argued that the reversal of his conspiracy conviction precluded the use of the underlying conduct supporting that conviction for purposes of an aggravating role enhancement under section 3B1.1, and that there was no basis for imposing the enhancement unless the offense of conviction involved more than one participant. The 8th Circuit rejected these arguments based on the November, 1990, amendment to section 3B1.1, which provides that the determination of a defendant’s role in the offense is to be made on the basis of all relevant conduct. U.S. v. Rosnow, 9 F.3d 728 (8th Cir. 1993).
8th Circuit upholds managerial enhancement where defendant did not contest facts in PSR. (431) The 8th Circuit upheld a role in the offense enhancement under section 3B1.1(c) based on evidence that defendant recruited couriers and coordinated shipments of large amounts of marijuana. The district court properly relied on statements in the PSR. Defendant did not object to the factual allegations in the PSR; in fact, he relied upon them to support his argument against the enhancement. U.S. v. Flores, 9 F.3d 54 (8th Cir. 1993).
8th Circuit upholds four level leadership enhancement. (431) The 8th Circuit affirmed a four level leadership enhancement under section 3B1.1(a). Contrary to defendant’s claims, the criminal activity clearly involved five or more participants — the four other co-defendants who were convicted of crimes related to defendant’s offense and defendant himself. The record showed several ways in which defendant organized and led the criminal activity. When defendant and a co-conspirator started the conspiracy in 1991, only defendant knew the Colorado supplier. Defendant traveled to Colorado five times to obtain cocaine, but no co-defendant was present on more than three of these trips. Moreover, everyone called defendant the ringleader of the conspiracy. U.S. v. Kenyon, 7 F.3d 783 (8th Cir. 1993).
8th Circuit says leadership role in cocaine distribution supported enhancement for money laundering. (431) Defendant pled guilty to distributing cocaine base and money laundering. He argued that an enhancement for leadership role under section 3B1.1(a) was improperly based on his role in other relevant conduct, not the offense of conviction. The 8th Circuit upheld the enhancement. Although a leadership role in collateral conduct will not support an enhancement, a court may consider the defendant’s leadership role over acts that were either part of the crime of conviction or that furthered that crime. The evidence established that defendant played a leadership role in a criminal activity involving more than five persons. The criminal activity involving distribution of cocaine base constituted the primary source of the $125,000 that defendant laundered. U.S. v. Matthews, 5 F.3d 1161 (8th Cir. 1993).
8th Circuit views payments to defendant as evidence of his leadership role. (431) The 8th Circuit upheld the district court’s conclusion that defendant was an organizer or leader of criminal activity under section 3B1.1(a). Nearly $1 million was sent by other conspirators to defendant, whose beeper served as the conspirators’ common link. Evidence suggested that defendant directed other conspirators. Defendant also boasted to an undercover officer that he was the leader of the activity. The court also upheld an enhancement for a co-defendant who was referred as the “big boss.” U.S. v. Ortiz-Martinez, 1 F.3d 662 (8th Cir. 1993)
8th Circuit notes payment of legal counsel for underlings in upholding management adjustment. (431) Defendant’s sentence for drug activity was enhanced by three levels for managerial or supervisory role under 3B1.1. The 8th Circuit characterized defendant’s appeal on this issue as “nearly frivolous.” Defendant had advanced money to obtain legal counsel for drivers of marijuana loads when they were arrested, had recruited coconspirators, had advanced money to others for marijuana purchases, and had received commissions for providing contacts to sources of marijuana. U.S. v. Miller, 994 F.2d 441 (8th Cir. 1993).
8th Circuit includes buyers in calculating size of defendant’s organization. (431) The district court adjusted defendant’s offense level because defendant was an organizer or leader of a criminal activity involving five or more participants. Defendant argued that the district court erred by including as participants people who simply bought drugs from defendant. The 8th Circuit concluded that the district court had not clearly erred in including the buyers. Defendant sold the drugs to his buyers in large quantities. U.S. v. Greene, 995 F.2d 793 (8th Cir. 1993).
8th Circuit affirms that defendant’s drug organization involved five or more participants. (431) The 8th Circuit affirmed that defendant was an organizer of a criminal activity involving five or more participants. Evidence was introduced at trial that defendant distributed marijuana in large amounts (more than 10 pounds at a time, hundreds of pounds over several years) directly or through an intermediary to four individuals. There was testimony at sentencing that the delivered marijuana was broken up into smaller packages by two others. U.S. v. Greene, 995 F.2d 793 (8th Cir. 1993).
8th Circuit affirms leadership or supervisor role in cocaine conspiracy. (431) The 8th Circuit upheld a two level leadership or supervisorial enhancement under section 3B1.1(c) based on evidence that defendant supervised her son, broke cocaine down with a co-conspirator at her residence, and delivered cocaine to various dealers. Although the son was acquitted of the cocaine conspiracy charge, he was convicted of possession of cocaine. Several witnesses testified that the son accompanied his mother on at least one delivery and, at the time of their arrest, attempted to hide the cocaine they were delivering. U.S. v. Edwards, 994 F.2d 417 (8th Cir. 1993).
8th Circuit upholds leadership enhancement for defendant who set terms of transactions. (431) The 8th Circuit upheld a leadership enhancement under section 3B1.1(a) based on evidence that the drug conspiracy was extensive, large amounts of cash were found in defendant’s home, and defendant always arranged the drug transactions and dictated the minimum quantities dealers were required to purchase. A defendant who profits from cocaine sales, sells to mid-level distributors, and establishes the terms of the transactions fits the broad definition of a leader. U.S. v. Edwards, 994 F.2d 417 (8th Cir. 1993).
8th Circuit considers relevant conduct for determining number of participants in drug activity. (431) Defendant negotiated to purchase drugs from an undercover agent. The 8th Circuit affirmed that defendant was an organizer or leader of drug activity that involved five or more participants. It previously determined that uncharged drug sales made by defendant were relevant conduct for sentencing purposes. A government agent and a co-conspirator established that at least seven people other than defendant were involved in these sales. Because the sales were relevant conduct, they could be considered in determining the number of participants in the drug activity. U.S. v. Nichols, 986 F.2d 1199 (8th Cir. 1993).
8th Circuit affirms managerial role of president of financial corporation. (431) Defendant, the president of a financial corporation, entered into a scheme which permitted a client to transfer untaxed cash income through the corporation in return for untaxable loan proceeds. The 8th Circuit affirmed a two level managerial enhancement under section 3B1.1(c). Defendant was the president of the corporation. He formed the company. He admitted that a Canadian accountant who assisted in the money transfer worked for him. He conducted seminars promoting the corporation’s activities. Defendant also encouraged others to break the law under section 2T1.9(b)(2). The evidence established that defendant repeatedly encouraged his clients to hide income through his actions and words. He also admitted to similarly helping others. U.S. v. Sileven, 985 F.2d 962 (8th Cir. 1993).
8th Circuit says defendant who split profits and supervised couriers was an “organizer.” (431) The 8th Circuit upheld a two-level enhancement under section 3B1.1(b) for being an organizer or supervisor of a drug conspiracy. The district court found that defendant and another co-conspirator jointly organized the activity of the first drug conspiracy. Defendant split the conspiracy’s significant profits with this co-conspirator, supervised drug couriers, and administered drug distribution. U.S. v. Bruce, 984 F.2d 928 (8th Cir. 1993).
8th Circuit finds that defendant was co-leader of drug conspiracy. (431) The 8th Circuit affirmed that defendant was a leader or organizer of a drug distribution conspiracy. He was the sole conspirator in charge of the supply side of the conspiracy, being an equal partner with the leader of the distribution side of the conspiracy. The manner in which defendant stepped in to perform the distribution leader’s duties regarding transportation when this leader was unavailable was more consistent with a role of a co-leader, rather than merely a “janitor” answering the phone when the “president” was away. When defendant’s supply dried up, he recruited another party to join the conspiracy in order to provide a supply. U.S. v. Adipietro, 983 F.2d 1468 (8th Cir. 1993).
8th Circuit rules that defendant was manager of drug conspiracy. (431) The 8th Circuit affirmed that defendant was a manager or supervisor of a drug conspiracy based upon evidence that he recruited a co-conspirator, directed and managed the activities of this co-conspirator, and at times directed the activities of two other conspirators. The district court specifically found that the conspiracy consisted of at least five members and possible seven, and that the conspiracy was otherwise extensive. U.S. v. Adipietro, 983 F.2d 1468 (8th Cir. 1993).
8th Circuit finds managerial status for defendant who was key link in distribution chain. (431) The 8th Circuit affirmed defendant’s managerial status in light of evidence in the record that (1) defendant recruited a co-conspirator into the conspiracy, (2) defendant was a key link between the supply of cocaine in Florida and its distribution in Iowa, (3) defendant was able to supply large quantities of cocaine during the course of the conspiracy, and (4) defendant was able to set a price for the cocaine. U.S. v. Harris, 982 F.2d 317 (8th Cir. 1992).
8th Circuit affirms that defendant was a leader in marijuana conspiracy. (431) The 8th Circuit affirmed that defendant held a leadership role in a marijuana distribution conspiracy. More than five individuals were involved in the conspiracy, and they served as subordinates to defendants. Two participants identified defendant as their boss. Four others worked as drivers for defendants. Defendant’s wife and another man both collected payments for defendant. That man also lived in a house purchased by defendant to serve as a transfer point for shipments. Defendant established the price his buyer paid for marijuana. U.S. v. Alexander, 982 F.2d 262 (8th Cir. 1992), appeal after remand, 12 F.3d 1103 (8th Cir. 1994).
8th Circuit says objection to managerial enhancement was waived by not raising it at first appeal. (431) At defendant’s first appeal, the 8th Circuit found that a drug transaction was improperly considered relevant conduct, and remanded for resentencing. After resentencing, defendant appealed the imposition of a managerial enhancement under section 3B1.1(b), contending that in his first appeal the circuit court had held that fewer than five participants were involved in his offense, and thus the district court failed to follow the law of the case. The 8th Circuit rejected this argument, finding defendant waived his challenge to the managerial enhancement by failing to object to it during his first appeal. The appellate court never held that the offense involved fewer than five participants. Moreover, even if defendant had not waived the issue, the appellate court would have affirmed the enhancement. Defendant conceded that including himself, there were five participants. U.S. v. Montoya, 979 F.2d 136 (8th Cir. 1992).
8th Circuit upholds organizer enhancement for defendant who recruited accomplice for robbery. (431) The 8th Circuit affirmed an organizer enhancement under section 3B1.1(c) based upon defendant’s role in a bank robbery. His accomplice testified that defendant recruited him to commit the crime, provided him with the baseball cap, sunglasses and demand note, and organized the bank robbery. U.S. v. Pedroli, 979 F.2d 116 (8th Cir. 1992).
8th Circuit upholds leadership enhancement for defendant who initiated tax fraud scheme. (431) The 8th Circuit affirmed that defendant was leader of a criminal activity involving five or more participants. The initial idea for the scheme was defendant’s and he willingly participated with his co-conspirator in the recruitment of participants (more than five), several of whom were defendant’s relatives. There was evidence that defendant received the bulk of the ill-gotten gains from the scam, and that he was slated to receive a larger share of the profits than the others who participated later in the conspiracy. U.S. v. Jagim, 978 F.2d 1032 (8th Cir. 1992).
8th Circuit affirms that four others were involved in offense of conviction, not collateral conduct. (431) Defendant claimed that the district court misapplied a leadership enhancement under section 3B1.1(a) by considering individuals involved in conduct collateral to the charged offense. The 8th Circuit upheld the enhancement, since there was evidence from which the district court could properly infer that the four other participants were involved in the offense of conviction, not merely in collateral conduct. U.S. v. Hale, 977 F.2d 455 (8th Cir. 1992).
8th Circuit rejects claim that defendant was equal participant in drug conspiracy. (431) Defendant’s sentence was enhanced under section 3B1.1(c) for his leadership role in a drug conspiracy. He argued that this was improper because not enough participants were criminally responsible. All but one of his original co-conspirators were cleared of charges, and defendant contended that the remaining co-conspirator participated equally with him. The 8th Circuit upheld the enhancement, since section 3B1.1(c) does not depend on the number of participants. Defendant’s claim that he and his co-conspirator were equal participants was rejected. The district judge based his finding in part on testimony and evidence he heard in presiding over the codefendant’s trial. Moreover, defendant’s attorney conceded at sentencing that defendant set the price for one of the drug transactions, and that defendant was the most culpable because he was chemically dependent during the time of the heroin transactions. U.S. v. Bost, 968 F.2d 729 (8th Cir. 1992).
8th Circuit affirms that defendant who had access to money orders was leader of stolen money order conspiracy. (431) Defendant stole postal money orders, which he and his co-conspirators altered and cashed. The 8th Circuit affirmed defendant’s leadership role under section 3B1.1(a) based on his access to the money orders. Defendant could be an organizer or leader without having directly controlled his co-conspirators. He had sole access to the money orders, which were the essential ingredient of the crime. Defendant’s position allowed him to control the timing and amount of money orders stolen and altered during the conspiracy. U.S. v. Grady, 972 F.2d 889 (8th Cir. 1992).
8th Circuit upholds organizer enhancement despite less than overwhelming evidence. (431) The 8th Circuit affirmed a four-level enhancement under section 3B1.1(a) based on defendants’ organizer status in criminal activity that involved five or more participants. In light of the evidence presented at the first defendant’s trial on the CCE count, his challenge was wholly without merit. With respect to the other defendant, while the evidence was less than overwhelming, it was still sufficient to justify the enhancement. That defendant conceded that he “organized” his girlfriend. He fronted cocaine to one subdealer, called her daily to monitor her progress in selling it, and used her house to store cocaine. Defendant threatened two other subdealers when they failed to pay him on time, and taught one of them how to cut cocaine to earn a larger profit. There was also evidence that two additional subdealers were “organized” by defendant. These subdealers each bought cocaine from defendant on a regular basis, which defendant knew was being resold. U.S. v. Holt, 969 F.2d 685 (8th Cir. 1992).
8th Circuit affirms aggravating role enhancement for heroin seller. (431) Defendant was convicted of conspiring to distribute and possess heroin. The 8th Circuit affirmed an aggravating role enhancement under section 3B1.1(c) in light of evidence that defendant was involved with other heroin dealers, he sold a co- conspirator heroin, and knew that the co-conspirator sold heroin to others. U.S. v. Briggs, 969 F.2d 689 (8th Cir. 1992).
8th Circuit holds that five co-conspirators each held managerial roles in drug conspiracy. (431) The 8th Circuit found that it was not clearly erroneous for the district court to infer that five defendants were managers of supervisors of a drug conspiracy. After the source of methamphetamine dried up, one defendant secured an alternative source for the network. The second defendant served as the middleman for dealings between various dealers. A third defendant purchased one pound of methamphetamine from the first defendant for resale. A fourth defendant provided drugs to a distributor for resale, and if the distributor wanted drugs for personal use, that defendant would refer him to individuals selling drugs at the street level. When the drug source did not want to receive payments directly, payments were made to the fifth defendant. At the fifth defendant’s direction, three men drove methamphetamine from Missouri to Arkansas. U.S. v. England, 966 F.2d 403 (8th Cir. 1992).
8th Circuit affirms that defendant was leader of stolen book ring. (431) The 8th Circuit affirmed the district court’s determination that defendant led and organized an organization which stole $5 million worth of books over a 15-year period from over 150 institutions throughout the United States. The offense involved five or more participants and was an “otherwise extensive” criminal activity. Although defendant usually stole the books himself, two others participated in the thefts on a few occasions. These participants also guarded the house where the books were kept and helped defendant move the books over state lines. Others helped transport the books interstate. Another participant received several shipments of stolen books, and two co-defendants helped move the stolen books from Minnesota to Iowa. U.S. v. Blumberg, 961 F.2d 787 (8th Cir. 1992).
8th Circuit rules district court stated adequate basis for leadership enhancement. (431) The 8th Circuit rejected defendant’s contention that the district court failed to adequately state the factual and legal bases for its imposition of a leadership enhancement under section 3B1.1. After both parties argued the role in the offense issue at sentencing, the court asked the prosecutor to identify the participants and to specifically address their criminal responsibility for defendant’s offense. The prosecution named six persons and described their involvement, and defense counsel responded. The court then summarily found defendant was the leader of criminal activity that involved at least five other participants and the activity was otherwise extensive. Although the court did not explain its reasoning, it was clear that the court adopted the prosecutor’s explanation. U.S. v. Blumberg, 961 F.2d 787 (8th Cir. 1992).
8th Circuit affirms leadership enhancement for defendant who suborned perjury. (431) Defendant pled guilty to four counts of suborning perjury in connection with his trial for mail fraud. The 8th Circuit upheld a two-level enhancement under guideline section 3B1.1(c) based upon defendant’s leadership role in the offense. A witness testified at defendant’s sentencing hearing that during the month in which defendant’s mail fraud trial was to begin, defendant asked her to lie for him and composed the story she later told the jury. Defendant arranged a subsequent meeting between the witness and a detective, and even transported the witness to the meeting. Defendant called the witness every day after this meeting and the two rehearsed her story “over and over.” The witness testified that she never called defendant or suggested that they rehearse her story. Thus, defendant was the initiator of the scheme, the composer of the perjury, and the author of every decision regarding its presentation to law enforcement officials. U.S. v. Lincoln, 956 F.2d 1465 (8th Cir. 1992).
8th Circuit affirms leadership role where person was helping defendant sell drugs. (431) The 8th Circuit upheld a managerial enhancement under 3B1.1 despite defendant’s claim that it was based on unreliable hearsay in the presentence report. The evidence supporting the enhancement was that (1) defendant sold cocaine to undercover officers, (2) admitted he lived on the second floor of the apartment in which police founds guns, four ounces of cocaine, and over $8,000 in cash, (3) a person in the apartment when defendant was arrested stated he was helping defendant sell drugs, and (4) three months later, defendant possessed $3,300 in cash. The district court did not have to rely the person’s hearsay statement about helping defendant sell drugs, because defendant also volunteered this statement, on his recross-examination at trial. The sentencing court was entitled to rely on evidence presented at trial. U.S. v. Roberts, 953 F.2d 351 (8th Cir. 1992).
8th Circuit upholds four-level leadership enhancement for drug distributor. (431) The 8th Circuit rejected all of defendant’s challenges to a four-level enhancement under section 3B1.1(a) for his leadership role in a drug conspiracy. Because there were five or more participants, the government was not required to prove that the conspiracy was “otherwise extensive.” Defendant was an organizer of the conspiracy, rather than merely a manager or a supervisor. Defendant exercised some decision-making authority by determining the amount of marijuana to be obtained from the supplier and by determining when and to whom he would resell the drug; he participated at the high end of the chain of distribution; he recruited his cousin to sell drugs for his co-conspirator; he received a profit on every pound of marijuana he sold; and he participated in planning the ordering, storage and redistribution of the cocaine and marijuana. U.S. v. Harry, 960 F.2d 51 (8th Cir. 1992).
8th Circuit upholds leadership enhancement for defendant who introduced cocaine into existing marijuana conspiracy. (431) The 8th Circuit affirmed a four-level enhancement for defendant’s leadership role in a drug conspiracy. Defendant organized the sale on credit of marijuana and introduced cocaine into the existing marijuana distribution scheme. He controlled or exercised authority over others. The scope of the distribution downstream indicated that defendant had substantial responsibility in the scheme. U.S. v. Flores, 959 F.2d 83 (8th Cir. 1992).
8th Circuit upholds leadership enhancement for defendant who supplied drugs and extended credit to dealers. (431) The 8th Circuit affirmed a three-level enhancement based upon defendant’s leadership role in the offense. There was evidence that defendant supplied several “mid-level drugs dealers,” and that defendant had extended credit to at least some of the individuals for their drug purchases. U.S. v. Duckworth, 945 F.2d 1052 (8th Cir. 1991).
8th Circuit upholds managerial enhancement based upon purity of cocaine, large number of customers and recruitment of others. (431) The 8th Circuit upheld a three level managerial enhancement under guideline section 3B1.1(b), rejecting defendant’s contention that this enhancement was based solely upon the purity of the drugs involved. Purity of drugs is an appropriate factor to consider because possession of unusually pure narcotics may indicate a prominent role in the enterprise and proximity to the source. Not only did defendant possess and sell 90 percent pure cocaine, but he was selling it to about 75 customers in quantities of up to one-half ounce. At one time defendant had four ounces of cocaine. Additionally, defendant recruited others to help finance his cocaine purchases. Defendant did not dispute that the conspiracy involved five or more persons. U.S. v. Wichmann, 958 F.2d 240 (8th Cir. 1992).
8th Circuit upholds managerial role for methamphetamine dealer (431). The 8th Circuit found no error in the district court’s determination that defendant was a manager or supervisor in a criminal activity involving five or more participants. The district court did not make “rote findings by parroting the language” of § 3B1.1(b). The court named three of the participants, noted that defendant was a drug dealer of some size and substance, had many customers coming to him for drugs, and supervised runners. Defendant admitted at his plea hearing that his two suppliers knew he was going to resell the drugs. Evidence presented at the plea hearing indicated that the drug conspiracy included defendant and his two suppliers, and five other people who ran drugs and collected money for defendant. Direct testimony linked five of these seven conspirators to defendant, while two were linked through hearsay testimony. U.S. v. Apfel, 945 F.2d 236 (8th Cir. 1991).
8th Circuit upholds leadership of drug dealer. (431) A drug distributor need not be the main supplier in a geographical area in order to be considered a leader. Here, defendant directed the distribution of drugs, organized two co-conspirators to manufacture methamphetamine, and coordinated the sale of drugs through another conspirator. The district court’s finding that defendant was the center of the scheme and that he organized at least five people was not clearly erroneous. U.S. v. Fuller, 942 F.2d 454 (8th Cir. 1991).
8th Circuit finds no improper consideration of information outside offense of conviction to determine leadership role. (431) Defendant pled guilty to interstate transportation of securities obtained by fraud as a result of her involvement in a scheme to obtain fraudulent claim checks from her insurance company employer. The 8th Circuit found no evidence that the district court improperly considered information outside the offense of conviction in determining that defendant was the manager of criminal activity in interstate commerce. Defendant was the first person to join the scheme with her co-conspirator; she thoroughly understood the details of the scheme and recruited other persons; and she was entitled to one-half of the proceeds from checks she cashed and one-third of the proceeds issued to third parties. The court also rejected defendant’s contention that because the charge did not indicate more than one other person was involved in the crime, it was error to find the criminal activity involved at least 5 other participants. U.S. v. Andersen, 928 F.2d 243 (8th Cir. 1991).
8th Circuit affirms application of guidelines to defendant who organized tax conspiracy. (431) Defendant and other tax-protesters organized an elaborate scheme whereby a participant would file a fraudulent Form 1099 with the IRS falsely reporting the payment of income to a person who had “committed a wrong” against the participant, and then would file a tax return fraudulently claiming a refund for the money reported paid on the 1099. The victims of the conspiracy included a bankruptcy judge, a congressman, the Commissioner of the IRS, and numerous IRS agents and employees. The 8th Circuit affirmed that defendant was properly sentenced under guideline § 2T1.9, Conspiracy to Impair, Impede or Defeat Tax, rather than guideline § 2T1.3, Fraud and False Statements Under Penalty of Perjury. Given the victims of the fraud, it was also proper to increase her offense level under guideline § 3A1.3 for targeting official victims. The evidence also amply supported an enhancement for her role as manager or supervisor in the offense; defendant was one of the core members of the conspiracy and chiefly responsible for the manufacture and distribution of many of the fraudulent documents. U.S. v. Telemague, 934 F.2d 169 (8th Cir. 1991).
8th Circuit affirms that defendant supervised five or more participants in gambling operation. (431) The 8th Circuit found that there was sufficient evidence that defendant supervised five or more persons in his gambling business. One man accepted bets from others and passed them on to defendant for a percentage of the action. Three others also accepted wagers for others and turned them over to defendant. Testimony at trial also indicated that several bartenders at defendant’s restaurant passed out line sheets, collected money, and paid off bettors for defendant. The enhancement was not improperly based upon defendant’s role in collateral conduct, rather than the offense of conviction. Defendant was convicted of using interstate wire facilities to obtain gambling information while engaged in the business of gambling. Running a gambling business is a “fundamental aspect” of this offense, and therefore defendant’s leadership role in that business was an appropriate basis for the leadership enhancement. U.S. v. Sutera, 933 F.2d 641 (8th Cir. 1991).
8th Circuit affirms leadership role of president of corporations. (431) Defendant and two corporations were convicted for violating federal obscenity laws. The 8th Circuit affirmed a four-level increase in offense level for defendant’s leadership role in the offense, since defendant was “an active president of the defendant corporations.” U.S. v. ABC, Inc., 952 F.2d 155 (8th Cir. 1991).
8th Circuit upholds organizer role of drug dealer. (431) The 8th Circuit found that the record supported the district court’s finding that defendant was organizer of a conspiracy to distribute cocaine. The record showed that defendant hired a co-conspirator to drive the truck containing the cocaine, recruited another co-conspirator to follow the first co-conspirator in another vehicle, paid the first co-conspirator $2,000 for two days of work, and had been under investigation for some time in other states for extensive, high-volume cocaine trafficking. U.S. v. Maejia, 928 F.2d 810 (8th Cir. 1991).
8th Circuit affirms leadership role of drug dealer. (431) The 8th Circuit found that the evidence supported the trial court’s determination that defendant was an organizer and leader of a drug ring. Defendant supplied cocaine to numerous people for resale. He used several bank accounts of one friend for his cocaine proceeds, instructing his drug customers to use the friend’s name when paying for cocaine by check. Defendant made major purchases in the friend’s name. Defendant persuaded a different friend to convert large amounts of cash into larger bills for him and to purchase cashier’s checks for him. On at least two occasions, defendant requested a third friend to accompany him to a bank, where he used this friend’s identification to purchase additional cashier’s checks. Defendant had one of the friends drive him to his drug deals. U.S. v. Contreras, 927 F.2d 1058 (8th Cir. 1991).
8th Circuit upholds determination that defendant who brought other participants into drug deal was organizer. (431) The 8th Circuit upheld the district court’s four level increase in defendant’s base offense level for being an organizer. Defendant brought the other participants together and set up the location of the drug deal. Defendant flew to the location, arranged for hotel rooms for the buyers and sellers, cut part of the cocaine, communicated between groups of dealers, and participated in the drug sale to FBI agents. U.S. v. Wiegers, 919 F.2d 76 (8th Cir. 1990).
8th Circuit finds that defendant who handled proceeds from drug sales was manager or supervisor. (431) Evidence indicated that defendant encouraged another person to become involved in a drug conspiracy by allowing the conspirators to use the person’s apartment as a base of operations. Defendant also had responsibility for handling the proceeds from the drug sales. The 8th Circuit found that this evidence supported the district court’s finding that defendant was a manager or a supervisor, justifying a three-level increase in offense level. U.S. v. Turpin, 920 F.2d 1377 (8th Cir. 1990).
8th Circuit upholds determination that defendant was an organizer of drug distribution ring. (431) Evidence at trial supported a finding that there were at least five other participants in defendant’s criminal activity. There was testimony that defendant fronted crack cocaine to one person, sold crack to three others who then resold it, and provided the drug to a fifth person in exchange for that person registering defendant’s vehicles in that person’s name rather than defendant’s. These persons would contact defendant by paging his beeper. The district court concluded that defendant “got cars in other people’s names, apartments in other people’s names, and he controlled them and he controlled the crack which was the whole basis of their operation . . .” The 8th Circuit found that the district court’s finding that defendant was an organizer or leader was not clearly erroneous. U.S. v. Yerks, 918 F.2d 1371 (8th Cir. 1990).
8th Circuit affirms that supplier for animal drug smuggling ring was organizer and manager. (431) The 8th Circuit found that there was sufficient evidence to support defendant’s enhancement for being an organizer and manager of an animal drug smuggling ring. Defendant was one of the largest suppliers of unapproved animal drugs in the United States, met with his customers to discuss smuggling the drugs into the United States, made the arrangements with European suppliers to send the drugs to Canada, and met with bank officials regarding a letter of credit for one of his customers. U.S. v. Dall, 918 F.2d 52 (8th Cir. 1990).
8th Circuit holds that defendant need only manage the criminal activity, not the co-conspirators. (431) The 8th Circuit found that there was sufficient evidence for the district court to conclude that defendant acted as manager of many drug transactions. Defendant procured, stored and sold drugs to several other people and paid his suppliers. “To be a manager, a defendant in a drug conspiracy need not control or manage the activities of the co-conspirators — it is sufficient that the facts show that the defendant managed the criminal activity.” U.S. v. Lawrence, 918 F.2d 68 (8th Cir. 1990).
8th Circuit finds that defendant who set up lab in basement was leader. (431) The district court found that defendant was a leader because he brought the other participants together and set up the methamphetamine laboratory in his basement. Defendant also introduced one co-defendant to the drug for the first time and sought advice from the government informant on improving the manufacturing process. Based on these findings, the 11th Circuit held that the district court’s determination that defendant was a leader was not clearly erroneous. U.S. v. Keene, 915 F.2d 1164 (8th Cir. 1990).
8th Circuit finds that defendant who initiated transactions and negotiated prices was a manager or supervisor of stolen goods ring. (431) Defendant was a participant in a stolen goods ring involving several other people. The 8th Circuit found that the district court’s determination that defendant was a manager or supervisor of the criminal activity was supported by the evidence. Defendant initiated transactions, negotiated prices, recruited individuals and was characterized as a spokesperson for the group. Defendant did not need to be controlling other individuals to be considered a manager or supervisor. U.S. v. Russell, 913 F.2d 1288 (8th Cir. 1990).
8th Circuit affirms finding of “leader and organizer” where defendant possessed blank checks which were fraudulently cashed. (431) Defendant claimed that the timing and location of the criminal expeditions were all joint decisions, the conspirators split the profits equally and all of the participants were autonomous. Thus, he argued that he could not be considered a leader or organizer under § 3B1.1. The 8th Circuit disagreed, finding that “[t]he district court had correctly focussed on possession and control of the blank checks as the most significant guide to the sources of control in this conspiracy.” The checks were the key to making money from the group’s operation. The evidence also supported an inference that the defendant maintained control over the “principal instrumentality of this criminal scheme” throughout the duration of the conspiracy. Based upon these facts, the district court did not clearly err in concluding that the defendant was a leader or organizer of the ring. Thus, the enhancement was proper. U.S. v. Williams, 902 F.2d 675 (8th Cir. 1990).
8th Circuit holds that defendant was a manager or supervisor where he recruited others and set prices. (431) Defendant recruited another person into his methamphetamine conspiracy, was the main contact person between California and Iowa, was able to supply the drug on a regular basis, and set prices for the drug. The district court found that defendant was a manager or supervisor under guideline 3B1.1(b) and increased his base offense level by three. The 8th Circuit affirmed the increase, and commented that recruitment of others and setting of prices are strong support for a conclusion that a defendant is a manager or supervisor. U.S. v. Pierce, 907 F.2d 56 (8th Cir. 1990).
8th Circuit affirms that defendant who controlled pricing and distribution of cocaine was organizer. (431) The district court found that defendant controlled both the pricing and distribution of cocaine and that his profits indicated that he performed an aggravating role in a large conspiracy. In addition, the district court found that the amount defendant sold to individuals made it reasonable to conclude that some of his buyers were reselling the cocaine. Based on these facts, the 8th Circuit found that the district court’s conclusion that defendant was an organizer, leader, manager or supervisor was not clearly erroneous. U.S. v. Olesen, 920 F.2d 538 (8th Cir. 1990).
8th Circuit finds that defendant was manager or supervisor of five or more participants. (431) Government agents testified that the drug distribution network was very extensive and that the defendant played a supervisory role in the drug activities. The district court found that the defendant was a manager or supervisor of a criminal activity involving five or more participants. The 8th Circuit upheld the district court’s finding as not “clearly erroneous.” U.S. v. Murphy, 899 F.2d 714 (8th Cir. 1990).
8th Circuit affirms finding that defendants were “managers” of drug conspiracy. (431) Defendants monitored all drug sales and recruited accomplices. One defendant managed the financial negotiations and the other actively participated in the negotiations. The 8th Circuit held that the district court’s finding that defendants were “managers” of a drug operation was not clearly erroneous. U.S. v. Figueroa, 900 F.2d 1211 (8th Cir. 1990).
8th Circuit finds defendant’s role supported enhancement for manager status. (431 Drug defendant had chemical books and catalogs sent to his address and arranged for co-defendant’s to rent properties where methamphetamine was manufactured. His payment for these services was quantities of methamphetamine. He met with distributors to sell the drug and provided others with the drug for later sale. The 8th Circuit held that these facts were sufficient to warrant a three level enhancement of the defendant’s base offense level, and upheld the trial court’s findings in this regard. U.S. v. Holland, 884 F.2d 354 (8th Cir. 1989).
8th Circuit rules acquittal on CCE count does not preclude 4 point enhancement for “organizer” status. (431) A convicted drug trafficker argued that the district court erroneously enhanced his offense level after it found him to be an “organizer” under § 3B1.1(a) on the ground that his acquittal on the CCE count collaterally estopped the government from relitigating his involvement. The 8th Circuit disagreed and affirmed the sentence enhancement based upon the guideline’s allowance for consideration of all “relevant conduct.” The two elements required under § 3B1.1(a) overlap with, but are different from, the five substantive elements of a CCE charge. U.S. v. Haynes, 881 F.2d 586 (8th Cir. 1989).
9th Circuit upholds manager increase for pimp who used other woman to supervise minor. (431) Defendant’s trial on charges of sex trafficking of a minor by force, fraud, or coercion, in violation of 18 U.S.C. § 1591, included evidence that another, adult woman abetted defendant’s forcing a minor to engage in prostitution but may not have engaged in prostitution herself. Based on that evidence, the district court enhanced defendant’s offense level by two levels under § 3B1.1(c) because defendant was the organizer, leader, manager, or supervisor of a criminal organization. The Ninth Circuit held that the person whom defendant supervised need not commit the same underlying offense as the defendant as long as she was a knowing accessory to the crime. U.S. v. Smith, 719 F.3d 1120 (9th Cir. 2013).
9th Circuit upholds organizer enhancement in environmental case. (431) At defendant’s sentencing for conspiring to violate the Clean Air Act by failing to abate asbestos in a condominium project that his company bought, the district court found that defendant was an organizer or leader of the scheme and enhanced his sentence under § 3B1.1. Evidence at trial showed that defendant was heavily involved in decision making at the condominium project, that he had experience in project management, that he instructed a subordinate to obtain bids for abating the asbestos and made the decision not to abate the asbestos because of cost, and that defendant instructed subordinates to create a contract for removing the asbestos without taking proper precautions. The Ninth Circuit upheld the enhancement. U.S. v. Yi, 704 F.3d 800 (9th Cir. 2013).
9th Circuit upholds four-level leadership enhancement in drug-trafficking case. (431) Defendant pleaded guilty to conspiracy to distribute methamphetamine. Evidence presented to the district court at sentencing showed that defendant directed his girlfriend to travel to Mexico to pick up drugs, directed a coconspirator to deliver drugs in another city, directed other conspirators to make wire transfers to pay for drugs, arranged for others to serve as straw owners of his vehicle, and used another girlfriend to transfer packages of drugs to third parties. Also, other conspirators obtained drugs from defendant and took payment for drugs on his behalf. The Ninth Circuit held that this evidence was sufficient to support a four-level enhancement under § 3B1.1 because defendant was an organizer or leader of the drug-trafficking organization. U.S. v. Rivera, 527 F.3d 891 (9th Cir. 2008).
9th Circuit upholds role increase for supervising person not substantially involved in criminal conduct. (431) At defendant’s trial for executing a fraudulent scheme that solicited $37 million from investors, an accomplice, Cimaglia, testified that he prepared materials for defendant and interacted with investors under defendant’s direction. At sentencing, the district court enhanced defendant’s sentence under § 3B1.1(c) because defendant was the organizer, leader, manager, or supervisor of any criminal activity. The Ninth Circuit noted that under § 3B1.1, a supervised person need not be substantially involved in the criminal scheme and upheld the enhancement. U.S. v. Garro, 517 F.3d 1163 (9th Cir. 2008).
9th Circuit upholds four-level aggravating role enhancement for drug supplier. (431) Defendant supplied methamphetamine to a drug-trafficking conspiracy. Evidence at trial showed that defendant set the price and quantity of the drugs he sold. He also fronted drugs to another seller and threatened to harm her if she did not repay him in three days. At sentencing, the district court found that defendant engaged in planning the offense and provided instruction to other members of the conspiracy. On that basis, the district court imposed a four-level enhancement under § 3B1.1(a). The Ninth Circuit found the evidence sufficient to support the enhancement. U.S. v. Garcia, 497 F.3d 964 (9th Cir. 2007).
9th Circuit upholds leadership enhancement for civil rights offenses. (431) Defendants were founders of a neo-Nazi skinhead gang. They developed the rules and code of conduct for the group, indoctrinated new members, and decided whom to promote. Members of the group, but not the three defendants, went to a public park to intimidate Hispanics visiting there. Based on their activities in connection with the gang and the park incident, defendants were convicted of civil rights conspiracy (18 U.S.C. § 241) and violating the civil rights of the Hispanics in the park (18 U.S.C. § 245(b)(2)(B)). The district court imposed a four-level leadership enhancement, and the Ninth Circuit affirmed, finding that defendants’ leadership activities in the neo-Nazi gang showed their leadership in the conspiracy and their encouragement of the park incident. U.S. v. Allen, 341 F.3d 870 (9th Cir. 2003).
9th Circuit finds number of innocent employees and geographic reach made scheme “otherwise extensive.” (431) Two defendants used a legitimate business to defraud five of the business’s clients. The Ninth Circuit upheld the district court’s conclusion that one defendant was the leader of “criminal activity that … was otherwise extensive,” § 3B1.1(a), based on the fact that the defendant’s business employed ten innocent people and on the “geographic reach of the scheme.” U.S. v. Booth, 309 F.3d 566 (9th Cir. 2002).
9th Circuit upholds finding that defendant was leader or organizer of criminal activity. (431) The defendant pleaded guilty to possession of stolen mail. Based on information obtained from the defendant’s co-defendants, the PSR recommended a four-level enhancement for being the leader or organizer of criminal activity. The defendant countered with his own declaration stating that his co-defendants had actually organized the scheme, and he objected to the district court’s reliance on hearsay, but he did not request an evidentiary hearing. Relying on the information in the PSR, the district court enhanced the defendant’s sentence by four levels because he was an organizer or leader of criminal activity. The Ninth Circuit found no clear error in that determination. It found that the criminal activity involved five participants and that the evidence showed that the defendant recruited some of the other participants and instructed them to steal mail, deposit checks, and destroy unwanted stolen mail. U.S. v. Berry, 258 F.3d 971 (9th Cir. 2001).
9th Circuit upholds two-level increase for involving 18-year-old son in drug offense. (431) In a statement of facts at the time of the guilty plea, defendant agreed that he directed his 18-year-old son to deliver cocaine to the undercover officer. Based on this fact, the district judge increased defendant’s offense level by two on two independent grounds: (1) because defendant exercised a leadership role in directing his son in the drug transaction, and (2) because involving the son in the crimes justified an upward departure. On appeal, the Ninth Circuit held that both grounds were proper. Defendant was the leader in coordinating the distribution of drugs, and he exercised authority over his son and others in the apartment complex in order to complete his drug deals. The two-level increase was also proper as a departure for involving the 18-year-old son in the drug offenses. Although the evidence did not show that defendant coerced his son into the drug trade, it did show that he facilitated his involvement. The court did not discuss the new guideline § 3B1.4 for use of a minor in the offense. U.S. v. Salcido-Corrales, 249 F.3d 1151 (9th Cir. 2001).
9th Circuit upholds role enhancement where defendant “organized” independent smugglers. (431) As stated in U.S. v. Varela, 993 F.2d 686, 691-92 (9th Cir. 1993), “[a]n enhancement may be proper where, as here, a defendant organizes others in the commission of the criminal activity even though he does not retain a supervisory role over the other participants.” See also U.S. v. Camper, 66 F.3d 229, 231 (9th Cir. 1995) (quoting Varela). Here, defendant argued that the people who smuggled the pharmaceuticals across the border were “independent contractors, smugglers-for-hire, with [defendant] being only one of their many customers.” However, the Ninth Circuit upheld a two-level role enhancement under § 3B1.1(c) on the ground that defendant “organized” the activity because he “told the [smugglers] when to make a crossing, what pharmaceuticals to purchase, and where to deliver them.” U.S. v. Montano, 250 F.3d 709 (9th Cir. 2001) .
9th Circuit says “made” man in mafia was organizer or leader. (431) Defendant and co-conspirators were convicted of extortion and money laundering. The district court found that he was an organizer or leader under § 3B1.1(c) and increased his sentence by two levels. Defendant appealed, denying having exercised any decision-making authority in a “conspiracy by equal partners.” The 9th Circuit upheld the adjustment, based on the record which reflected that other conspirators looked to the defendant for approval of their plan, because he was considered a “made” man in the mafia organization, who answered only to his own boss. The co-conspirators’ deference to defendant illustrated his control and authority over them. U.S. v. Panaro, 266 F.3d 939 (9th Cir. 2001).
9th Circuit upholds aggravating role for carjacking defendant who controlled co-defendant. (431) To impose a two-level increase for an aggravating role under § 3B1.1(c) “there must be evidence to support a finding that the defendant occupied one of the four specified roles, not merely that the defendant was more culpable than others who participated in the crime.” U.S. v. Harper, 33 F.3d 1143, 1150 (9th Cir. 1994). “When a defendant supervises other participants, she or he need exercise authority over only one of the other participants to merit the adjustment.” U.S. v. Maldonado, 215 F.3d 1046, 1050 (9th Cir. 2000). Further, “[a] single incident of persons acting under a defendant’s direction is sufficient evidence to support a two level role enhancement.” Id. In the present case, the district court found that the carjacking was defendant’s idea, and that he controlled the co-defendant. Defendant also told the co-defendant to cut the victim’s throat, which the co-defendant did. The Ninth Circuit said that under Maldonado, “even that single incident is sufficient to support the enhancement.” U.S. v. Morgan, 238 F.3d 1180 (9th Cir. 2001).
9th Circuit affirms finding office manager was a participant in money laundering. (431) Despite the probation officer’s contrary recommendation, the district court found that defendant’s office manager was a criminal responsible participant in the money laundering offense and therefore increased defendant’s sentence for supervisory role in the offense under § 3B1.1. On appeal, the Ninth Circuit found this a “close question,” but noted that the officer manager had pled guilty to one count each of mail fraud and wire fraud. This supported the inference that because she was aware of the fraudulent activity, she was also aware of the money laundering. The district court “did not need to make specific findings of fact in support of an upward role adjustment.” See U.S. v. Lopez-Sandoval, 146 F.3d 712, 716. The panel upheld the role increase as “not clearly erroneous.” The increase was not improper double counting, even though defendant also received a four level role increase for the fraud offense. U.S. v. Syrax, 235 F.3d 422 (9th Cir. 2000).
9th Circuit upholds role increase where defendant was in charge of the operation. (431) The Ninth Circuit said two sets of facts permitted the court to find that defendant was “an organizer, leader, manager, or supervisor” under § 3B1.1(c). First, defendant had multiple, seemingly surreptitious meetings with Cruz surrounding the two drug sales, and made a trip to his storage locker after one of the sales. Secondly, a large majority of the drug proceeds from the two sales were seized from defendant’s storage locker. The Ninth Circuit held that this evidence was sufficient to permit a reasonable inference that defendant was in charge of the operation, at least with respect to Cruz. The district court’s findings were not clearly erroneous. U.S. v. Garcia-Guizar, 227 F.3d 1125 (9th Cir. 2000).
9th Circuit upholds two-level role increase where defendant negotiated and provided drugs. (431) The Ninth Circuit found no clear error in a two-level leadership role increase. Defendant usually did the negotiating and provided the drugs to the agents. Vargas worked for defendant and attended many meetings with defendant involving drug trafficking. Tellingly, when the agents bought drugs during these meetings, Vargas received payment and delivered the money to defendant. In addition, another person, Lopez, worked under defendant’s direction, and at least once delivered drugs to a buyer at defendant’s request. U.S. v. Maldonado, 215 F.3d 1046 (9th Cir. 2000).
9th Circuit finds defendant supervised tax preparer in creating fake tax returns. (431) In order to qualify for bank loans, defendant persuaded his tax preparer to concoct fake tax returns showing more income than he actually reported to the IRS. At sentencing, the district court increased defendant’s offense level by two levels for supervising the tax preparer. On appeal, the Ninth Circuit affirmed, finding that at the very least, defendant supervised the tax preparer in creating the fake tax returns. U.S. v. Hicks, 217 F.3d 1038 (9th Cir. 2000).
9th Circuit finds defendant was a “manager or supervisor” of extortion attempt. (431) Defendant Mikayelyan admitted that he was the one initially contacted by Bekaryn to put together an extortion team. He subsequently recruited several of the people involved in the car-stealing conspiracy to carry out the extortion attempt. He instructed them to drive to Glendale, California and meet Bekaryn for further instructions. Moreover, Mikayelyan was the leader of the overall car stealing conspiracy. On these facts, the Ninth Circuit held that the district court’s finding that Mikayelyan was a “manager or supervisor” under § 3B1.1(b) was not clearly erroneous, and the district court did not err in increasing defendant’s offense level by three levels. U.S. v. Sarkisian, 197 F.3d 966 (9th Cir. 1999).
9th Circuit upholds leadership increase where defendant exercised control over others. (431) The district court increased defendant’s offense level by four levels under § 3B1.1(a) for his leadership role in illegally harvesting and selling Geoduck clams. He argued that this was error because he never negotiated the price of the clams and was not involved in marketing or distributing the shellfish. The Ninth Circuit found this argument unpersuasive because defendant exercised control over those involved in the initial harvest and sale of the clams. The district court correctly concluded that defendant was the key organizer and the “mainstay of the organization.” U.S. v. Narte, 197 F.3d 959 (9th Cir. 1999).
9th Circuit bases four-level role increase on relevant conduct in the overall fraud scheme. (431) Defendant argued that the district court improperly increased his offense level for the money laundering group by four levels for being an “organizer or leader.” The Ninth Circuit rejected the argument, relying on U.S. v. Savage, 67 F.3d 1435, 1443-44 (1995) where a defendant similarly asserted that the district court properly applied the role in the offense adjustment to his fraud convictions, but not to his money laundering convictions. The Savage court rejected the defendant’s argument, holding that the defendant’s “role in the entire mail and wire fraud scheme is relevant conduct for purposes of determining his aggravating role in money laundering.” Likewise, in the present case, the district court properly considered defendant’s role in the entire wire fraud scheme in determining he should receive a four-level increase for his role in the money laundering scheme. U.S. v. Hanley, 190 F.3d 1017 (9th Cir. 1999).
9th Circuit upholds organizer or leader enhancement for alien smuggler. (431) The evidence demonstrated that defendant’s organization had been smuggling aliens for several years. Residents of small Mexican villages knew to call defendant’s phone number to arrange for transportation to the United States. The extensive records in the case demonstrated defendant’s role in planning and organizing the criminal activity. The assets of the organization, including the houses and vehicles used, were primarily in defendant’s name. She drove vehicles to the rendezvous site and always returned in the car that was not carrying the illegal aliens, distancing herself from them in case the car would be stopped by the police. The Ninth Circuit held that “[c]onsidered together, this evidence establishes her extensive and dominant role in the organization.” Accordingly, the district court’s finding that she was an organizer or leader was not clearly erroneous. U.S. v. Barajas-Montiel, 185 F.3d 947 (9th Cir. 1999).
9th Circuit finds defendant supervised at least one other participant in environmental crime. (431) The district court found that defendant owned half of the company and would have benefited more than others from the offense. He also knew about the company’s day-to-day activities, and located a farmer on whose farm he could improperly dump the sewage sludge. When a defendant supervises other participants, he need exercise authority over only one of the other participants to merit the adjustment. Here the evidence supported the district court’s finding that defendant supervised at least one other participant. U.S. v. Cooper, 173 F.3d 1192 (9th Cir. 1999).
9th Circuit upholds supervisory role even though supervisee was not prosecuted. (431) Under Guideline § 3B1.1, Application Note 1, a participant in the offense is “a person who is criminally responsible for the commission of the offense, but need not have been convicted.” See U.S. v. Cyphers, 130 F.3d 1361, 1363 (9th Cir. 19997). Here, defendant was a supervisor of a railroad construction project in Alaska when a backhoe operator ruptured an oil pipeline that ran through the construction area. Defendant was convicted of violating the Clean Water Act, when oil from the pipeline polluted a nearby river. The Ninth Circuit held that the district court did not clearly err in increasing defendant’s sentence by two levels because, even though the backhoe operator was not prosecuted, he was nonetheless a participant in the criminal activity, and defendant was the supervisor of the project. U.S. v. Hanousek, 176 F.3d 1116 (9th Cir. 1999).
9th Circuit says findings were sufficient to support supervisor role increase. (431) Defendant was given a two-level enhancement under § 3B1.1(c) for his role as a supervisor in the drug transaction. The district court found that defendant “did supervise the activities of at least two other individuals, so the two-level increase is appropriate.” The Ninth Circuit held that these factual findings were sufficient because they were based on the evidence in the case and adopted the presentence report, which specifically stated that defendant supervised both Rodriguez and Johnson, and described how he supervised them. “Based upon the record and the findings, the district court did not clearly err in making this factual determination.” U.S. v. Beltran, 165 F.3d 1266 (9th Cir. 1999).
9th Circuit finds conspiracy involved five or more participants and was otherwise extensive. (431) Defendant argued that the district court should not have increased his offense level by four levels under 3B1.1(a), claiming that he was not an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive. The Ninth Circuit rejected the argument, noting that five co-defendants signed plea agreements with the government, and there were seven persons in all, including defendant and a fugitive. Moreover, the case was a paradigm of “otherwise extensive” criminal activity. It involved interstate travel and a large number of victims, including, Harrah’s casino and its terrorized patrons, as well as nearly $100,000 in robbery proceeds. U.S. v. Govan, 152 F.3d 1088 (9th Cir. 1998).
9th Circuit upholds finding that defendant was manager or supervisor. (431) The Ninth Circuit found no clear error in adjusting defendant’s offense level upward under § 3B1.1(b) on the ground that he was a “manager or supervisor . . . and the criminal activity involved five or more participants or was otherwise extensive.” Defendant told the informant that he was “the only one that was answering for this merchandise.” He had another person run an errand for him; he set up the final transaction but did not handle the drugs himself. Accordingly, the Ninth Circuit agreed that the district court could properly find that the others acted at his direction. U.S. v. Franco, 136 F.3d 622 (9th Cir. 1998).
9th Circuit upholds leadership role for doctor who engaged in Medicare fraud. (431) The Ninth Circuit upheld a leadership role for an eye surgeon who was convicted of Medicare fraud. Numerous employees said they falsified records and submitted false claims at his direction. This was sufficient to support the enhancement. U.S. v. Rutgard, 116 F.3d 1270 (9th Cir. 1997).
9th Circuit upholds role increase for “mastermind” of bank robbery. (431) The district court concluded that defendant was the “mastermind” of the bank robbery. He recruited the getaway driver and paid her $1,500 for driving the getaway car. He kept almost all of the proceeds of the bank robbery for his role in the offense. Thus the district court properly increased his offense level by two levels under § 3B1.1(c). U.S. v. Wills, 88 F.3d 704 (9th Cir. 1996).
9th Circuit finds defendant was organizer of five or more in counterfeit credit card scheme. (431) Contrary to defendant’s claims, the evidence supported the district courts findings that defendant organized the operation to deal in counterfeit access devices, and that he organized or managed five or more participants. Defendant possessed the instrumentalities of credit card counterfeiting, including stolen account numbers and an embossing machine for printing counterfeit cards. U.S. v. Camper, 66 F.3d 229 (9th Cir. 1995).
9th Circuit upholds organizer enhancement for overseeing “colossal” quantities of cocaine. (431) Based on seized ledgers, the presentence report concluded that McTague had coordinated the distribution of about 77 tons of cocaine in the three month period between June and September 1989. To accomplish this he worked with and supervised two codefendants. The district court imposed a four level upward adjustment pursuant to §3B1.1(a) on the ground that McTague was an “organizer or leader.” On appeal, the Ninth Circuit rejected McTague’s argument that he was simply a “watchman,” finding that he oversaw the procurement and distribution of “colossal” quantities of cocaine in the Los Angeles area. He also repeatedly exercised decision-making authority and functioned in an organizational role in determining when, where, and to whom the drugs would be sold. U.S. v. Ponce, 51 F.3d 820 (9th Cir. 1995).
9th Circuit upholds leadership role, saying there can be more than one leader. (431) Defendant argued that his 2-level leadership enhancement was improper because other coconspirators also exercised some degree of decision-making authority and control. The Ninth Circuit ruled that noting limits the imposition of the role enhancement in 3B1.1 to the participant who was “most in control.” Whether someone else was “more of a leader” was not determinative. U.S. v. Alonso, 48 F.3d 1536 (9th Cir. 1995).
9th Circuit says heroin importing conspiracy was “otherwise extensive.” (431) The conspiracy involved defendant and at least three subordinate participants, utilizing the unknowing services of many outsiders. Defendant rented a warehouse in Hong Kong, hired a shipping company to import the heroin, and used a trucking agency to transport it to Los Angeles. The 9th Circuit said it “would be contrary to the clear language of the rule to conclude that an organized drug operation that extends from Hong Kong to Los Angeles to Vancouver, and that is responsible for the distribution and importation of 55.74 kilograms of heroin valued at $179,000,000, does not constitute ‘otherwise extensive’ criminal activity under U.S.S.G. §3B1.1(a).” U.S. v. Leung, 35 F.3d 1402 (9th Cir. 1994).
9th Circuit upholds enhancement for organizer of scheme to defraud winery. (431) Although it was unclear whether defendant was the leader of a widespread scheme to defraud numerous wineries, there was sufficient evidence that he was the organizer of the persons who defrauded the Delicato winery. U.S. v. Licciardi, 30 F.3d 1127 (9th Cir. 1994).
9th Circuit upholds finding that defendant was a “supervisor.” (431) The district court adjusted defendant’s sentence upward by two levels under section 3B1.1, based on the testimony of two codefendants who stated they worked for the defendant and were being paid by him. On appeal, the defendant challenged their credibility, but the 9th Circuit found “no basis in the record to substitute our judgment for the decision of the district court on that issue.” The district court’s characterization of defendant as a “supervisor” was not clearly erroneous. U.S. v. Diaz-Rosas, 13 F.3d 1305 (9th Cir. 1994).
9th Circuit upholds leadership enhancement where activity was “otherwise extensive.” (431) The 9th Circuit held that the four point increase for leadership role was justified because, while there were only three, not five, participants, the criminal activity was “otherwise extensive,” under guideline section 3B1.1. There were four employees at the chemical company who were unwittingly involved. In addition, defendant “bought chemicals from supply companies in both New Jersey and Seattle, necessarily involving people at both places.” U.S. v. Roberts, 5 F.3d 365 (9th Cir. 1993).
9th Circuit finds defendant supervised sales of cocaine base. (431) The evidence showed that when a buyer arrived at the gate to the house from which defendant was selling cocaine base, one of defendant’s codefendants would approach the buyer, get the money, and return to defendant, who remained on the porch, would take the money, count it, and give the cocaine base to his co-defendants, who would then deliver it to the buyer. On these facts, the 9th Circuit held the district court did not clearly err in enhancing defendant’s sentence by two levels for being an organizer, leader, manager, or supervisor. U.S. v. Fagan, 996 F.2d 1009 (9th Cir. 1993).
9th Circuit upholds role increase for principal negotiator in reverse sting. (431) In increasing defendant’s offense level by four levels for his role in this reverse sting drug conspiracy, the district court relied on findings in the presentence report that defendant was the principal negotiator between the government and the conspirators, delivered the money and exercised authority over an assistant. The 9th Circuit affirmed, finding these facts justified increases in similar cases and the district court’s determination was not clearly erroneous. U.S. v. Barnes, 993 F.2d 680 (9th Cir. 1993).
9th Circuit finds permanent hierarchical relationship not required for aggravating role. (431) Defendant was convicted of various narcotics and gun offenses based on his sale of methamphetamine, cocaine, marijuana and guns to undercover agents. The district court applied the 2 level increase for aggravating role under §3B1.1(c) finding defendant coordinated the various drug suppliers and the undercover agents. The 9th Circuit affirmed, finding that the fact defendant and his suppliers were not in a permanent hierarchical relationship did not preclude the role enhancement. The enhancement reflects the greater level of culpability of the participant who arranges the transaction. U.S. v. Varela, 993 F.2d 686 (9th Cir. 1993).
9th Circuit upholds organizer role adjustment in fraud case. (431) The record reflected that defendant exercised decision-making authority and recruited accomplices for a scheme that had at least three participants and used the unknowing services of many outsiders. Accordingly, the district court did not err in making a four level upward adjustment under section 3B1.1(a) for being an “organizer or leader.” U.S. v. Mullins, 992 F.2d 1472 (9th Cir. 1993).
9th Circuit finds five people involved in “staged collision” that was a “necessary precursor” to defendant’s social security fraud. (431) The district court found that five people participated in the staged automobile collision that was charged as part of the social security fraud and that defendant was their organizer and leader. Accordingly, four levels were added to defendant’s offense level under 3B1.1(b). The introductory commentary to Chapter 3, Part B of the Guidelines, as amended November 1, 1990, states that all relevant conduct should be included in considering defendant’s role in the offense. Here, the 9th Circuit found that the staged collision was a necessary precursor to defendant’s social security fraud and therefore constituted an act in furtherance of that offense. The four level adjustment was affirmed. U.S. v. Scarano, 975 F.2d 580 (9th Cir. 1992).
9th Circuit upholds finding that defendant was leader in the drug conspiracy. (431) Circumstantial evidence suggested that defendant exercised the decision-making authority in the conspiracy. The loading of the cocaine seemed to occur at his direction. He was the only member of the conspiracy present at all loadings of the cocaine into the tractor trailers. He delivered the cocaine in four of the five seizures. Thus, the 9th Circuit held that the district court’s finding that defendant was the leader of the conspiracy was not clearly erroneous. U.S. v. Castro, 972 F.2d 1107 (9th Cir. 1992).
9th Circuit finds defendant was a manager of activity involving five or more participants. (431) The evidence showed that Plancarte-Rea supervised a heroin network consisting of several persons, two of whom were charged in the same indictment. While defendant was not the organizer or leader of the conspiracy, his role as the manager of the heroin sales network was sufficient to support his enhancement under U.S.S.G. section 3B1.1(b) for being a manager or supervisor of a criminal activity that involved five or more participants or was otherwise extensive. U.S. v. Arias-Villanueva, 998 F.2d 1491 (9th Cir. 1993), implied overruling recognized by U.S. v. Jimenez-Ortega, 472 F.3d 1102 (9th Cir. 2007).
9th Circuit upholds organizer enhancement for defendant who shared economic reward equally with codefendant wife. (431) The district court found that codefendants were co-equal partners, but not for all purposes. The record showed that the defendant designed and led the criminal scheme. Thus, the enhancement for his role as organizer and leader of the offense was proper under U.S.S.G. section 3B1.1(c). U.S. v. Peters, 962 F.2d 1410 (9th Cir. 1992).
9th Circuit holds that, although not prosecuted, two associates and twelve unlicensed hunters were “participants” in crime. (431) Defendant organized four illegal hunt groups involving himself, two guides/ranch owners and twelve individual hunters. Thus, each of the four hunts consisted of defendant, the two guides/ranch owners and at least two hunters (at least five participants) and there were fifteen “participants” total. Consequently, defendant had organized a criminal activity that involved five or more participants and the court properly enhanced defendant’s sentence by four levels under U.S.S.G. section 3B1.1(a). U.S. v. Atkinson, 966 F.2d 1270 (9th Cir. 1992).
9th Circuit upholds finding that defendant was a manager, given “low burden of proof.” (431) The district court found that defendant was a manager because he was “often on site,” and “recruited and hired two of the illegal aliens” and gave them instructions on how to make the counterfeit tapes. The 9th Circuit affirmed, given “the low burden of proof required for sentencing, and our limited standard of review.” U.S. v. Hernandez, 952 F.2d 1110 (9th Cir. 1991).
9th Circuit upholds managerial role where defendant recruited another person and acted as manager. (431) The district judge based its increase on the fact that defendant helped recruit at least one other person and played a managerial role in the scheme. The 9th Circuit found this determination was not clearly erroneous. U.S. v. Koenig, 952 F.2d 267 (9th Cir. 1991).
9th Circuit upholds organizer enhancement for defendant who provided substantial sum of cash to purchase marijuana. (431) The district court increased defendant’s base offense level by two points under section 3B1.1(c) for being an “organizer” because he provided a business associate with a substantial sum of cash with which to purchase marijuana. The 9th Circuit upheld the enhancement, despite defendant’s contention that this was merely a “loan.” The district court’s contrary determination was not clearly erroneous. U.S. v. Schubert, 957 F.2d. 694 (9th Cir. 1992).
9th Circuit upholds “leader or organizer” enhancement based on defendant’s financial backing for the marijuana growing operation. (431) Defendant financed the marijuana growing operation in return for which the co-defendants were obligated to sell their crops to him. Without defendant there would have been no financial backing for the operation. Therefore the district court’s finding that defendant was the leader of the conspiracy was not clearly erroneous. U.S. v. Motz, 936 F.2d 1021 (9th Cir. 1991).
9th Circuit upholds managerial role for defendant convicted of managing a building for distributing heroin. (431) Defendant was convicted of renting or managing a building for the purpose of storing, distributing and/or using heroin, in violation of 21 U.S.C. § 856. He argued that it was error to add two offense levels for his role as an organizer or manager under guideline § 3B1.1(c) because the offense incorporated his status as a manager. The 9th Circuit rejected the argument, noting that § 856 criminalizes only the managing of the building, and does not address other forms of management. Here there was ample evidence that the defendant managed other drug related activities and people, going beyond mere control of the drug house. The court held that this related information could be considered “relevant conduct” in calculating the base offense level. U.S. v. Martinez-Duran, 927 F.2d 453 (9th Cir. 1991).
9th Circuit upholds finding that defendant was a manager or supervisor of cocaine-smuggling operation. (431) Defendant’s offense level was increased by two points based upon the district court’s finding that defendant acted as a manager or supervisor in a cocaine-smuggling operation. The 9th Circuit upheld this finding based upon the high level of sophistication of the operation and evidence that defendant supervised the preparation of the trucks used to smuggle the cocaine, recruited his accomplices, and exercised decisionmaking authority. Rejecting the government’s argument that the issue had been waived, the court found that defendant had preserved the issue for appeal by disputing the government’s contention that defendant owned the vehicles used to smuggle the cocaine. U.S. v. Sanchez, 908 F.2d 1443 (9th Cir. 1990).
9th Circuit upholds leadership enhancement where defendant coordinated buying and selling drugs. (431) The guidelines impose greater penalties on the organizers and leaders of criminal conspiracies than on other participants. Defendant challenged the sentencing judge’s conclusion that defendant was an organizer or leader in the drug conspiracies for which he was convicted. Judges Fernandez, Tang, and Norris concluded that the sentencing judge’s finding that defendant was an organizer or leader was not clearly erroneous. The court relied on the reasons listed in the presentence report, incorporated by reference by the sentencing judge. Defendant was a “heavy drug dealer” commonly dealing in cocaine and heroin; he negotiated the price during drug deals; he had indicated that he had alternative sources should his usual suppliers be unable to meet demand; and several of his undercover negotiations dealt with large amounts of currency in exchange for large amounts of illegal substances. U.S. v. Avila, 905 F.2d 295 (9th Cir. 1990), superseded on other grounds by guideline as stated in U.S. v. Hopper, 27 F.3d 378 (9th Cir. 1994).
9th Circuit upholds leadership enhancement even though only two participants committed a single crime. (431) The sentencing judge enhanced defendant’s sentence because of defendant’s leadership role in a single drug transaction. Defendant argued that this could cause the leader of a single drug sale to receive the same sentence as the leader of an ongoing criminal enterprise. Judges Wallace, Alarcon, and Leavy agreed, but upheld the enhancement. The court noted that the 1989 amendments to the guidelines remove this anomaly by increasing the sentence for participation in a continuing criminal enterprise. The court characterized as “entirely without merit” defendant’s argument that the leadership enhancement is inapplicable to crimes involving only two participants. Regarding defendant’s role as a leader, the court found that the sentencing judge did not commit clear error in making this “essentially factual determination” in light of defendant’s control of the drug transaction. U.S. v. Carvajal, 905 F.2d 1292 (9th Cir. 1990).
10th Circuit affirms defendant’s leadership role in counterfeit drug scheme. (431) Defendant sold counterfeit versions of various weight-loss products. The Tenth Circuit held that the record supported the district court’s conclusion that he was a leader or organizer under § 3B1.1(a). During recorded encounters with undercover agents, defendant stated that he owned the two companies producing and distributing the counterfeit drugs, that he was “the boss” of this enterprise, and that he had no other partners. He assured the undercover agents that he had no need to ask permission or seek approval from anyone else involved in the enterprise. In the course of several post-arrest interviews, defendant explained that while he outsourced the fabrication of the various components of the drugs to associates in China, he was solely responsible for the overall manufacture and distribution of the counterfeit products. Although defendant attempted to paint a different picture, the transcript of the sentencing hearing made it clear that defendant accepted the government’s proffer of evidence. U.S. v. Shengyang Zhou, 717 F.3d 1139 (10th Cir. 2013).
10th Circuit rules defendant was organizer or leader of illegal poaching operation. (431) Defendant and his brother sold guided deer hunts to out-of-state hunters, and encouraged their clients to violate state hunting laws. They pled guilty to conspiring to sell and transport poached deer in violation of the Lacey Act, 16 U.S.C. §§ 3372(a)(2)(A) and 3373(d). The Tenth Circuit upheld a four-level increase for being the organizer or leader of criminal activity involving five or more participants. The record contained ample evidence that defendant leased the land on which the illegal hunts occurred, hired employees to help with the hunting operation, and personally guided several clients. Moreover, § 3B1.1(a) only requires that defendant organize or lead one other participant, and he admitted in his briefing that he hired his brother as a guide. U.S. v. Butler, 694 F.3d 1177 (10th Cir. 2012).
10th Circuit agrees that defendant was leader of housing fraud conspiracy. (431) Defendant, a builder and developer, was involved in a conspiracy to defraud mortgage lenders in connection with the subprime housing market. The Tenth Circuit upheld a § 3B1.1 organizer/ leadership enhancement. The district court’s findings supported the conclusion that the criminal activity involved five or more participants (Vanatta, Irvin, Sparks, Harris, and defendant himself), and that defendant (1) played a central role in the commission of their criminal activities; (2) recruited accomplices to the criminal activity, such as Vanatta; and (3) directed the criminal activity to the extent he retained final authority over sales prices. Defendant complained that neither Sparks nor Middleton directly testified that he was their leader, and that Sparks admitted engaging in bank fraud independent of defendant’s involvement. Nevertheless, the indicia of leadership listed in the commentary to § 3B1.1(4) were present, and the district court did not err in applying the § 3B1.1 enhancement. U.S. v. Irvin, 682 F.3d 1254 (10th Cir. 2012).
10th Circuit finds sufficient evidence that defendant was leader of marijuana conspiracy. (431) Defendant challenged the district court’s finding that he acted as an organizer or leader of a criminal activity that involved five or more participants. § 3B1.1. Co-conspirator’s statements in the PSR showed that defendant and McPherson flew out to see co-conspirator Livingston after Livingston was arrested to “figure out how they were going to operate the business.” At the sentencing, another witness explained that most of the marijuana deliveries were taken to defendant, or split between defendant and McPherson. When Livingston introduced other members of the conspiracy to the supplier, defendant met with the supplier first. By monitoring conspirators’ phone calls, the government was able to establish that defendant almost certainly made more calls to the supplier than other members of the conspiracy. The supplier stated that it appeared that defendant was “in charge.” In light of this evidence, the Tenth Circuit held that the district court did not clearly err in classifying defendant as a leader or organizer of the conspiracy. U.S. v. Damato, 672 F. 3d 832 (10th Cir. 2012).
10th Circuit rules that defendant held organizer role in mortgage-fraud scheme. (431) Defendant, a self-employed homebuilder, operated a complex mortgage-fraud scheme that involved inflating the housing sales prices and manipulating the loan process to enable unqualified buyers to purchase homes. The Tenth Circuit ruled that defendant met sufficient criteria to qualify him as an “organizer” of the mortgage-fraud scheme under § 3B1.1(c). Defendant orchestrated or otherwise directed the mortgage-fraud scheme when he taught his co-conspirators how to conduct and conceal the scheme; inflated the price and negotiated the sale of the houses he built; coached others on how to submit false information and documentation; recruited another homebuilding company for the purpose of furthering the fraud scheme; and convinced home buyers to purchase homes for artificially high prices by promising them cash after closing and furnishing his own funds to provide them with money for down payments, closing costs, debt payoff, and fraudulent inflation of their bank accounts. U.S. v. Snow, 663 F.3d 1156 (10th Cir. 2011).
10th Circuit agrees that defendant held organizer role in conspiracy to retaliate against witness. (431) Defendant was convicted of conspiracy and retaliation against a witness, in violation of 18 U.S.C. § 1513(b)(1), based on his involvement in the beating of a witness who testified against him in a tax fraud case. The Tenth Circuit upheld a two-level enhancement for being an organizer or leader or the criminal activity. The evidence established, at the very least, that defendant conspired with his co-defendant (a) to encourage other inmates to participate in an assault on the witness, (b) to secure their presence in a location where they could carry out the assault, (c) to counsel them on when to start the assault, and (d) to engage in noise-making conduct to help ensure the assault’s successful completion. Although his co-conspirator was also responsible for coordinating the conspiracy and was probably more responsible for the planning than defendant, more than one person in a conspiracy can qualify as an organizer. U.S. v. Wardell, 591 F.3d 1279 (10th Cir. 2009).
10th Circuit finds defendant was leader of conspiracy to sell defective airplane engines. (431) Defendant and two co-defendants improperly overhauled small aircraft engines and falsely represented to customers that the engines met FAA requirements. The Tenth Circuit upheld the district court’s finding that defendant played a leadership role in the offense. First, defendant alone placed advertisements in Trade-A-Plane to sell the engines. Further, defendant alone explained to each victim why the engines were available for resale as well as representing, falsely, the basic qualify of the engines. Defendant alone engraved the data plates for the engines, which were a necessary and important element of the scheme. Finally, defendant frequently visited Good Aviation to check on the status of the engines and to direct the engine overhaul work. U.S. v. Parker, 553 F.3d 1309 (10th Cir. 2009).
10th Circuit reviews role increase for plain error where different claim was raised below. (431) Defendant challenged a two-level leadership increase, arguing that the district court failed to adequately explain its reasons for the enhancement. However, defendant never objected in the district court to the adequacy of the court’s explanation. His counsel only disputed whether sufficient evidence existed to support the enhancement. Because defendant did not alert the district court that he considered the court’s statement of reasons inadequate, the Tenth Circuit found that his claim for relief was forfeited. Therefore, court reviewed for plain error, and found none. To show plain error, defendant had to establish “a reasonably probability that, but for the error claimed, the result of the proceeding would have been different.” Defendant could not do this. Whatever the perceived inadequacy of the court’s recitation of its reasons, the court’s sentence was amply supported by evidence that was not contested by the defense. The government presented evidence that defendant gave his cousin orders about their drug business and restricted the people to whom his cousin could sell drugs. U.S. v. Uscanga-Mora, 562 F.3d 1289 (10th Cir. 2009).
10th Circuit finds defendant was leader of conspiracy to sell defective airplane engines. (431) Defendant and two co-defendants improperly overhauled small aircraft engines and falsely represented to customers that the engines met FAA requirements. The Tenth Circuit upheld the district court’s finding that defendant played a leadership role in the offense. First, defendant alone placed advertisements in Trade-A-Plane to sell the engines. Further, defendant alone explained to each victim why the engines were available for resale as well as representing, falsely, the basic qualify of the engines. Defendant alone engraved the data plates for the engines, which were a necessary and important element of the scheme. Finally, defendant frequently visited Good Aviation to check on the status of the engines and to direct the engine overhaul work. U.S. v. Parker, 553 F.3d 1309 (10th Cir. 2009).
10th Circuit says defendant who got drugs, packaged them for resale, and recruited others was “leader.” (431) Defendant and his brother operated a drug distribution ring. They exercised joint decision-making authority, determining what quantity of drugs they would purchase, how they would do so, and who would distribute those drugs. Defendant personally went to California to obtain drugs and then packaged the drugs for resale. Defendant and his brother recruited others to assist in transporting and selling drugs and to provide protection. The Tenth Circuit affirmed a leadership increase. The evidence taken together indicated that defendant was more than an ordinary drug dealer or participant in a drug dealing conspiracy. He was also more than “an important or essential” figure in the scheme. U.S. v. Sallis, 533 F.3d 1218 (10th Cir. 2008).
10th Circuit rules that defendant supervised prostitute who helped persuade minor to get into defendant’s car. (431) Defendant lured a 13-year old runaway girl into his car, and drove her across state lines for prostitution purposes. He pled guilty to transporting a minor across state lines in violation of the Mann Act, 18 U.S.C. § 2423(a). The district court found that Obsession, a prostitute who was in the car with defendant, was a participant in his offense, and that defendant supervised her. The Tenth Circuit agreed, and upheld the enhancement. Obsession participated in persuading the minor to get into defendant’s vehicle and, when the minor realized how far they were traveling, reassured her that they were merely visiting her mother. Because Obsession assisted in convincing the minor to get into the car, she was “criminally responsible” for the same offense as defendant. U.S. v. Scott, 529 F.3d 1290 (10th Cir. 2008).
10th Circuit rules defendant held organizational role in credit card fraud scheme. (431) Defendant was convicted of trafficking and using fraudulent credit cards. The Tenth Circuit upheld a § 3B1.1 leadership increase. Defendant clearly played an organizational role in the conspiracy by working with his co-defendant to identify the addresses of potential victims, using those addresses to access personal information regarding the identified victims, using the illegally obtained information to create fake Oklahoma driver’s licenses, and then either personally using those fake driver’s licenses or distributing them to his co-conspirators to falsely obtain store credit, purchase merchandise, and then sell the merchandise for a profit. Although the court did not specifically find that defendant organized or led his co-conspirators, it was clear that he exercised management responsibility over the critical property of the conspiracy and shared with his co-defendant the critical decision-making authority in the conspiracy by identifying the specific victims of the conspiracy. U.S. v. Wilfong, 475 F.3d 1214 (10th Cir. 2007).
10th Circuit applies reckless endangerment increase to passenger of car involved in high-speed chase. (461) After attempting to purchase $1,200 worth of merchandise using a fake driver’s license and credit card, defendant and his co-defendant fled in a car. When police attempted to stop the vehicle, the co-defendant, who was driving, drove off at a high rate of speed. A chase ensued, during which the driver drove in a reckless fashion and both the driver and defendant threw papers out of the vehicle. The district court imposed a § 3C1.2 reckless endangerment increase. Defendant argued that it was improper for the district court to hold him responsible for that recklessness, since he was the passenger rather than the driver of the vehicle. The Tenth Circuit affirmed the increase. Defendant was an active participant in the chase – he and the driver acted together in an attempt to obstruct justice by disposing of evidence. U.S. v. Wilfong, 475 F.3d 1214 (10th Cir. 2007).
10th Circuit says adoption of factual citations in government’s brief adequately supported manager increase. (431) The district court applied a three-level increase under § 3B1.1(b) based on defendant’s manager or supervisor role in a drug conspiracy. The government’s brief adopted by the court cited several facts to support the increase, including that defendant coordinated a co-conspirator’s methamphetamine delivery and that defendant exercised some supervision during a key meeting. The Tenth Circuit held that the court did not clearly err by applying § 3B1.1(b). The panel rejected defendant’s claim that the court’s order contained insufficient factual findings to support the increase. By adopting the factual citations in the government’s brief as part of its findings, the district court provided a clear and definite basis for enhancing defendant’s sentence. U.S. v. Gonzalez-Edeza, 359 F.3d 1246 (10th Cir. 2004).
10th Circuit holds high-level company employee was participant in Ponzi scheme. (431) In finding that defendant was the leader or organizer of criminal activity involving five or more participants, the district court found that Gallegos was a participant in the fraudulent investment scheme. The judge inferred that Gallegos, who held a high position in the company and had frequent conversations with defendant and other participants, knew that the company had no source of profits with which to repay investors. Gallegos knew that investors were nonetheless being paid, putting him on notice that the company was running a Ponzi scheme. He was a criminally responsible participant, because with knowledge that this group had no profits with which to repay investors, defendant continued to promote the activities of the group. U.S. v. Aptt, 354 F.3d 1269 (10th Cir. 2004).
10th Circuit holds that court’s findings were sufficient to support managerial role increase. (431) To qualify for an adjustment under § 3B1.1, “the defendant must have been the organizer, leader, manager, or supervisor of one or more other participants.” Note 2 to § 3B1.1. Defendant argued that a § 3B1.1 managerial role increase was improper because the district court called him a manager or supervisor of “the activity,” instead of a manager or supervisor of other “participants.” The Tenth Circuit found nothing improper about referring to defendant as a manager or supervisor of the activity, so long as the court did so on the basis of defendant’s relationship to one or more participants. The memo co-authored by defendant established that he was a principal architect of the mail fraud and money laundering scheme. The court properly cited defendant’s extensive involvement in furthering the organization’s activities as circumstantial evidence of his role in the scheme and his authority within the organization. Coupled with his role in planning and the fact that he was a vice president of the company, this evidence provided a reasonable factual basis for finding that he held a supervisory role over other participants in the scheme. U.S. v. Aptt, 354 F.3d 1269 (10th Cir. 2004).
10th Circuit affirms managerial increase where defendant’s home was center of activity. (431) The Tenth Circuit ruled that the district court properly found that defendant met the requirements for a three-level managerial role increase. The government showed by a preponderance of the evidence that there were at least five participants in the drug dealing. Based on the fact that it was defendant’s home that was the center of the activity, and that defendant planned much of the activity, the district court did not commit clear error in finding that he was a supervisor or manager of the operation. U.S. v. Lora-Solano, 330 F.3d 1288 (10th Cir. 2003).
10th Circuit holds that employee of nursing home operator was participant in bribery scheme. (431) Defendant, a state deputy commissioner responsible for overseeing Oklahoma’s nursing homes, solicited bribes, offered favored treatment to some care providers, and engaged in schemes to “trade” nursing home patients. The district court applied a § 3B1.1(c) enhancement for supervising Pralle, an employee of one nursing home. Defendant argued that Pralle was not a participant under the guidelines because he was not criminally responsible for the offense of conviction, offering or soliciting a bribe under 18 U.S.C. § 666. The Tenth Circuit rejected the argument since a court can consider all relevant conduct under § 1B1.3 in determining the application of § 3B1.1. Defendant supervised Pralle in committing crimes in order to further and conceal their scheme to defraud the government. Defendant gave instructions to Pralle on how to convince state officials a fraudulently backdated letter was genuine. Moreover, defendant told Pralle to prepare additional letters corroborating the backdated letter to quell the suspicions of the federal government. Accordingly, Pralle was a “participant” because he was criminally responsible for violations of 18 U.S.C. § 1035 (outlawing willful concealment of material facts and materially false statements about reimbursement for health care services) and § 1347 (proscribing schemes to defraud health care programs.). It did not matter that Pralle may not have been responsible for violating § 666. U.S. v. Vanmeter, 278 F.3d 1156 (10th Cir. 2002).
10th Circuit agrees that defendant was leader or organizer of counterfeit check conspiracy. (431) Defendant conspired with Isbell and two juvenile females to manufacture and cash counterfeit checks. The testimony presented at sentencing included statements by defendant’s co-conspirators that defendant (1) instructed them on how to use his computer to print the checks, (2) furnished the paper on which the checks were printed, (3) instructed them on how to dress and conduct themselves when cashing the counterfeit checks, (4) advised them on what to expect when the check was presented to the teller, and (5) warned them of the consequences if one or all were caught. The Tenth Circuit held that the district court’s finding that defendant was a leader or organizer of the conspiracy was amply supported by the evidence presented at the sentencing hearing. U.S. v. Suitor, 253 F.3d 1206 (10th Cir. 2001).
10th Circuit upholds finding that defendant was leader/organizer of stolen check ring. (431) Defendant was a member of a conspiracy that stole checks, credit cards, and identifications from mailboxes. The Tenth Circuit found sufficient evidence to support the district court’s finding that defendant was an organizer or leader. She was involved in the conspiracy from the beginning. She recruited others member of the conspiracy and distributed stolen mail to Duroy. She also forged signatures on checks and credit cards, then gave them to other conspirators to cash. Other conspirators accompanied defendant when collecting mail and cashing checks at drive through windows. The record contained conflicting information that suggested defendant took a large share of the proceeds than her co-defendants. Although reasonable minds could differ, the district court did not clearly err in applying the enhancement. U.S. v. Spears, 197 F.3d 465 (10th Cir. 1999).
10th Circuit upholds managerial enhancement for defendant who distributed drugs and controlled money. (431) Defendant was involved in a crack cocaine distribution conspiracy. The district court found that defendant was a manager because “he did at times perform the function of a gatekeeper to the money; he did at times perform the function of distributing the crack cocaine for further distribution; he did at times inform others as to what steps they should take for transmission of the money back to California.” The court also found that defendant supervised three other conspirators. The Tenth Circuit affirmed the § 3B1.1 enhancement because the evidence at trial supported these findings. U.S. v. Green, 175 F.3d 822 (10th Cir. 1999).
10th Circuit finds defendant was organizer of child pornography “chat room.” (431) Defendant was a member of an on-line Internet “chat room” that discussed child pornography and traded digital images via computer. He authored a “charter” for the chat room, which listed chat room goals, membership policies, and established procedures for keeping the chat room secret. The Tenth Circuit affirmed § 3B1.1(a) enhancement based on defendant’s organizer role in the conspiracy. Defendant authored the charter that established the chat room and location, a three-tiered membership system, the process for admitting new members, rules for maintaining secrecy, protocol for dealing with “member only” pornography, and chat room goals. Defendant operated an important site through which he coordinated distribution of the members’ pornography and provided members with copies of previously distributed pornography. He also coordinated approval of new chat room members. U.S. v. Tagore, 158 F.3d 1124 (10th Cir. 1998).
10th Circuit finds supplier had managerial role in methamphetamine ring. (431) Defendant was part of a street gang that supplied methamphetamine to a distribution ring operating. The Tenth Circuit affirmed a managerial enhancement based on evidence that defendant exerted control over the supply and price of the methamphetamine flowing from the gang to the distribution ring. He personally delivered quantities of methamphetamine to members of the conspiracy. On at least one occasion, he acted as a dispute mediator between members of the ring and members of the gang. The district court found that defendant was “if not the supplier, certainly the principal supplier” for the organization who set the price of the methamphetamine that flowed from the gang to the distribution ring. U.S. v. Flores, 149 F.3d 1272 (10th Cir. 1998).
10th Circuit says leader need only control one other person. (431) Defendant argued that a § 3B1.1(a) leadership enhancement was only appropriate where the leader or organizer controls at least five co-conspirators. The Tenth Circuit held that the § 3B1.1(a) only requires the government to prove that five persons participated in the criminal venture, and that defendant exercised leadership control over at least one person. The record demonstrated defendant’s leadership role over one conspirator. He recruited the co-conspirator, paid him, and acknowledged before the district court that the man was his employee. The record also supported the court’s finding that defendant controlled three other conspirators. Defendant recruited them and directed them to transport methamphetamine in furtherance of the conspiracy. There were at least two others over whom defendant exercised a leadership role. The government clearly met its burden here. U.S. v. Cruz-Camacho, 137 F.3d 1220 (10th Cir. 1998).
10th Circuit upholds enhancement for leadership role in conspiracy. (431) Defendant was involved in a methamphetamine operation. The Tenth Circuit upheld a § 3B1.1(a) leadership enhancement based on evidence that defendant recruited accomplices, directed them to go out and sell methamphetamine, and directed them to purchase necessary chemicals with money he gave them. Defendant exercised significant control over the operation. Only he and the other leader had keys to the methamphetamine lab. Defendant became the other leader’s equal partner, with responsibility for directing the manufacture of their product. Defendant taught others to cook methamphetamine, and his methamphetamine was reputed to be better than the other leader’s. U.S. v. Smith, 131 F.3d 1392 (10th Cir. 1997).
10th Circuit affirms leadership role in drug conspiracy. (431) Defendant was convicted of conspiracy to distribute cocaine base. The Tenth Circuit affirmed a four level enhancement for his role in the offense based on testimony that others in the conspiracy worked for defendant, that defendant provided his “crew” with cash and drugs and supplied them with lodging, clothes and food, and that the crack cocaine sold at the various crack houses was all supplied by defendant. U.S. v. Cantley, 130 F.3d 1371 (10th Cir. 1997).
10th Circuit finds defendant was leader or organizer of otherwise extensive fraud scheme. (431) Defendant recruited drivers to drive tow trucks. The drivers were required to pay defendant’s company about $4000 each as down payments on their tow truck leases. Thirty-six recruited drivers paid their money to defendant’s company but did not receive tow trucks or refunds. The company then went bankrupt. Defendant argued that a § 3B1.1(a) enhancement was improper because another man participated in all important decisions and the activity did not involve five or more participants. The Tenth Circuit affirmed the enhancement since defendant clearly was the organizer or leader of the towing company’s legal and illegal operations. He founded the company and was its president. The other man was vice president and left the company halfway through its four-month life span, while defendant continued to run the company until the bitter end. The enterprise was “otherwise extensive.” It spread from Denver to Phoenix, St. Louis and Atlanta. It lasted four months, created at least 40 victims, and generated losses in excess of $140,000. The operation involved considerable planning and complex execution, and included at least one other culpable participant as well as a number of other participants who may not have been culpable. U.S. v. Yarnell, 129 F.3d 1127 (10th Cir. 1997).
10th Circuit holds that organizer need not have control over subordinates. (431) Defendant became a partner with an existing drug dealer. Defendant’s participation allowed the business to expand significantly. He recruited the services of additional suppliers, none of whom would have worked for the original dealer without defendant’s involvement in the scheme. Defendant also coordinated the activities of the new suppliers, instructing at least one of them on how to cut and weigh the drugs. He also determined the financial terms for many of the sales, and shared responsibility with the original dealer for overseeing the operation. Defendant challenged a § 3B1.1(c) organizer enhancement because he did not exercise control over subordinates or underlings in the conspiracy. The Tenth Circuit held that an organizer need not have control over subordinates to receive the § 3B1.1(c) enhancement. Although control over others is necessary to find that a defendant is a leader, supervisor or manager, it is not necessary for an organizer. A defendant can organize illegal activity without exercising control over the other participants in the activity. U.S. v. Valdez-Arieta, 127 F.3d 1267 (10th Cir. 1997).
10th Circuit finds no ex post facto violation where offense continued after amendment. (431) Defendant was convicted of conspiracy, mail fraud and money laundering. The sentencing court considered as “relevant conduct” activity that occurred before the Nov. 1, 1990 amendment to § 3B1.1, which made clear that a sentencing court was to consider all relevant conduct in determining a defendant’s role. The Tenth Circuit found no ex post facto violation because part of the conduct for which defendant was convicted occurred after the amendment. Moreover, the district court properly found that more than one person was involved in the money laundering and that defendant was a leader or organizer. U.S. v. Hargus, 128 F.3d 1358 (10th Cir. 1997).
10th Circuit affirms leadership enhancement despite testimony that others held leadership role. (431) Defendant organized at least two fake automobile crashes involving family members in order to secure insurance payments. The Tenth Circuit found that a leadership enhancement was not clearly erroneous. The fact that some witnesses implicated others as the leading figures in the insurance scheme and exculpated defendant did not undermine the enhancement. More than one person can qualify as a leader of a criminal conspiracy. U.S. v. Knox, 124 F.3d 1360 (10th Cir. 1997).
10th Circuit holds that acquitted co-defendants can still be participants. (431) The district court found that defendant was an organizer or leader of criminal activity involving five or more participants under § 3B1.1(a). The Tenth Circuit rejected defendant’s claim that defendant’s acquitted co‑conspirators could not be criminally responsible participants. Even though a jury did not find the co‑conspirators guilty beyond a reasonable doubt, the district court was not foreclosed from finding by a preponderance of the evidence that they were criminally responsible participants in defendant’s drug conspiracy. U.S. v. Lacey, 86 F.3d 956 (10th Cir. 1996).
10th Circuit says participants need not have been convicted of crime. (431) The district court found that defendant was the leader of an extensive money laundering and drug ring. The Tenth Circuit agreed that at least five persons were involved under § 3B1.1(a). Participants must be criminally responsible for the commission of the offense, but need not have been convicted of the crime for which the defendant is sentenced. U.S. v. Hardwell, 80 F.3d 1471 (10th Cir. 1996).
10th Circuit upholds § 3B1.1(b) enhancement where counsel conceded defendant was manager and PSR showed five participants. (431) Defendant challenged the district court’s finding that he was a manager or supervisor of criminal activity involving five or more participants under § 3B1.1(b). The Tenth Circuit approved the enhancement, since defense counsel conceded at sentencing that the evidence supported a managerial enhancement and the PSR showed that the activity involved five participants. U.S. v. Cordoba, 71 F.3d 1543 (10th Cir. 1995).
10th Circuit agrees that defendant supervised courier and others who responded to pager. (431) A woman was arrested at the airport carrying cocaine base. She agreed to cooperate with police. She called her source in California (from where she had flown), reaching defendant. Defendant gave her two pager numbers and told her to page them. When the woman asked defendant about money to get home, he told her to bring him $2,000 back. The woman called the pager numbers, and two men arrived at the woman’s hotel room. The three made several references to defendant, and then called him again. Defendant spoke about getting a scale, weighing the drugs, and selling it. The Tenth Circuit agreed that defendant held a managerial role in the drug scheme. Although the woman testified that she owed defendant money for repairing her vehicle and that defendant had provided the pager numbers to encourage her to get money to pay him back, the district court discounted this portion of her testimony. The court had ample evidence that defendant supervised three participants—the woman and the two men. U.S. v. McKneely, 69 F.3d 1067 (10th Cir. 1995).
10th Circuit holds that defendant was organizer or leader despite incarceration. (431) Defendant argued that he could not have been the drug conspiracy’s leader because he was incarcerated during a large portion of the conspiracy. The Tenth Circuit affirmed the § 3B1.1(a) enhancement despite defendant’s incarceration. Defendant organized the conspiracy, set up an elaborate courier system, and introduced the conspiracy’s major source of cocaine. Moreover, he exercised control over various members of the conspiracy while he was incarcerated. U.S. v. Edwards, 69 F.3d 419 (10th Cir. 1995).
10th Circuit affirms § 3B1.1(a) enhancement where defendant acted as more than mere seller. (431) Defendant argued that he was not a leader in a drug conspiracy, claiming that his relationship with his co-conspirators was simply that of seller to buyer. The Tenth Circuit affirmed the leadership enhancement because there was sufficient evidence in the record from which to find defendant’s exercise of “independent management initiative.” The district court considered the co-conspirators’ testimony at the sentencing hearing and defendant’s own admissions at the plea proceeding. It could properly conclude that defendant played a leadership role beyond that of a mere “seller” with respect to his co-conspirators, who were purchasing quantities for resale. U.S. v. Browning, 61 F.3d 752 (10th Cir. 1995).
10th Circuit affirms § 3B1.1(c) enhancement where defendant controlled and directed at least four others. (431) Defendant pled guilty to multiple drug violations. The Tenth Circuit upheld a § 3B1.1(c) enhancement based on evidence that defendant controlled and directed the activities of at least four others. In following defendant’s orders, these individuals provided vital assistance in the procurement, distribution and sale of cocaine. U.S. v. Baez-Acuna, 54 F.3d 634 (10th Cir. 1995).
10th Circuit holds that defendant was leader of otherwise extensive fraud scheme. (431) Defendant was involved in a fraudulent loan scheme. The Tenth Circuit agreed with the district court’s finding that defendant was the organizer or leader of the scheme, and that the scheme was “otherwise extensive” under § 3B1.1(a). Defendant implemented the fraud scheme and enlisted his company’s employees to participate. He made most of the decisions regarding the program and received as much as one third of the fees paid to the company by its clients. The criminal scheme was otherwise extensive, having operations in both Atlanta and Oklahoma City, and advertising in national papers such as the Wall Street Journal and the Chicago Tribune. Moreover, defendant involved many employees other than the co-conspirators. Use of noncriminally responsible persons in a scheme is relevant to whether a crime is extensive. U.S. v. Massey, 48 F.3d 1560 (10th Cir. 1995).
10th Circuit finds trial testimony sufficient to support leadership enhancement. (431) The Tenth Circuit found that trial testimony was sufficient to support the conclusion that defendant held a leadership position in a crack cocaine conspiracy. One conspirator testified that defendant came to his house once or twice a day while crack was being sold, and gave instructions to those selling crack. Defendant also paid the rent on the conspirator’s house. Another conspirator testified how defendant received cocaine from Los Angeles and distributed it to the conspirators in Colorado. Defendant also gave her money to do things for him such as bail people out of jail and wire money. U.S. v. Robertson, 45 F.3d 1423 (10th Cir. 1995).
10th Circuit upholds managerial status for defendant who owned vehicle for hauling drugs and obtained motel room for conspirators. (431) The 10th Circuit agreed that defendant was an organizer of a drug conspiracy based on evidence that he had recruited accomplices, owned the vehicle used to haul drugs, and obtained the motel room in which the conspirators met. U.S. v. Melendez-Garcia, 28 F.3d 1046 (10th Cir. 1994).
10th Circuit says defendants convicted of lesser offenses were participants. (431) Defendant was convicted of conspiring to export illegally taken wildlife. He argued that there were not five participants for purposes of § 3B1.1(a) because all but three defendants were convicted of lesser offenses. The 10th Circuit held that a participant need not be guilty of the offense for which the defendant is sentenced. Participants are criminally responsible for an offense if their own criminal conduct made it possible. The four defendants who conspired to transport illegally taken wildlife across state lines clearly facilitated and made possible defendant’s export conspiracy. U.S. v. Allemand, 34 F.3d 923 (10th Cir. 1994).
10th Circuit holds that employer of participants held an organizational role. (431) Defendant and his brother ran an outfitting and guiding business on their ranch. They guided a big-game hunt for 11 Canadian hunters who did not have valid hunting licenses, and then conspired to export the trophy mounts of the illegally killed animals. The 10th Circuit upheld a managerial or organizational enhancement under § 3B1.1(b). The court could have concluded that defendant had control over the taxidermists because they called him about the lack of valid license numbers and he directed them to use a list of license numbers that he provided. The court also could have concluded that defendant was at least formally responsible for organizing the guides. Defendant held the outfitters’ license, so he was legally the guides’ employer. U.S. v. Allemand, 34 F.3d 923 (10th Cir. 1994).
10th Circuit affirms supervisor role for arranging financing for drug smuggling venture. (431) The 10th Circuit affirmed a § 3B1.1(d) enhancement based on defendant’s supervisorial role in a cocaine smuggling venture. For over five months, defendant participated in directing the operation. He arranged for large sums of money to finance the venture, advising co-conspirators of the amount available and providing directions on how to obtain the money. Defendant organized and arranged for the cocaine and played an integral role in planning the transportation of the cocaine into the United States. U.S. v. Pedraza, 27 F.3d 1515 (10th Cir. 1994).
10th Circuit affirms organizer enhancement for defendant who recruited others and owned vehicle to haul drugs. (431) The 10th Circuit upheld an organizer enhancement based on evidence that defendant had recruited two accomplices, owned the vehicle hauling the drugs, and obtained the motel room where the conspirators met. U.S. v. Melendez-Garcia, 28 F.3d 1046 (10th Cir. 1994).
10th Circuit relies on co-conspirator’s testimony to uphold organizer enhancement. (431) Defendant challenged an organizer enhancement under § 3B1.1(c), claiming he and his co-conspirator had equal culpability. The 10th Circuit upheld the enhancement, concluding the district court properly relied on the co-conspirator’s testimony during an evidentiary hearing to dismiss the conspiracy indictment. The co-conspirator testified that defendant gave him $11,000 to go to California to buy 17 ounces of cocaine and to deliver it to defendant in Utah. Others did the same thing for defendant. A taped telephone conversation between defendant and the co-conspirator corroborated the co-conspirator’s testimony. U.S. v. Tovar, 27 F.3d 497 (10th Cir. 1994).
10th Circuit upholds defendant’s leadership role even though associate instigated scheme. (431) Defendant’s former secretary worked at an American Express office. She sent defendant $2.6 million in checks, purportedly representing “overpayments” to an American Express vendor, which he deposited into bank accounts he controlled. A portion of the proceeds were returned to the former secretary. The 10th Circuit upheld a leadership or supervisory enhancement under §3B1.1(c), even though the secretary initiated the scheme. The secretary began the scheme to make her $1,000 rent payment. However, the scheme increased dramatically in size due to defendant’s initiative. He pressured her to send more checks. He also directed her as to when, where and how to send the checks. He recruited another man as a straw payee. Defendant also established and controlled the bank accounts and retained at least $1.7 million of the pilfered $2.6 million. U.S. v. Mandilakis, 23 F.3d 278 (10th Cir. 1994).
10th Circuit upholds role increase where defendant recruited others and received greater share of profits. (431) The 10th Circuit upheld an enhancement for role in the offense under § 3B1.1(c) based on evidence that defendant recruited accomplices and received a greater share of the fruits of the crime. U.S. v. Bridges, 50 F.3d 789 (10th Cir. 1994).
10th Circuit holds that defendant need not manage or organize at least five participants under section 3B1.1(b). (431) Defendant received an enhancement under section 3B1.1(b) for being the manager or organizer in a criminal activity involving five or more participants. The 10th Circuit held that section 3B1.1(b) does not require that a defendant manage or supervise at least five participants. Since it was undisputed that defendant managed at least two others, and that there were five participants in the criminal activity, the section 3B1.1(b) enhancement was confirmed. U.S. v. Reid, 911 F.2d 1456 (10th Cir. 1990), was distinguishable because it interprets section 3B1.1(a). Under section 3B1.1(a), to lead an organization you must control its members. However, to be a manager in an organization, you need not control all of its members. U.S. v. Johnson, 4 F.3d 904 (10th Cir. 1993).
10th Circuit finds that defendant was organizer of heroin importation scheme. (431) The 10th Circuit affirmed a two level enhancement under section 3B1.1(c) based on defendant’s role as an organizer, leader, manager or supervisor in a drug importation scheme. He exercised considerable decision-making authority, recruited accomplices, gave directions to co-conspirators, arranged for the bribery of customs officials, and made extensive travel and travel plans. U.S. v. Hanif, 1 F.3d 998 (10th Cir. 1993).
10th Circuit affirms organizer adjustment for key figure in drug transportation. (431) Defendant objected to the district court’s adjustment of his offense level for being an organizer or leader in his drug activity. The 10th Circuit found no clear error. Defendant was the key figure in the conspiracy’s transportation of cocaine from California to Oklahoma, he solicited and directed the involvement of the participants in the conspiracy, and he accepted the proceeds of sales through middlemen and was involved with partnerships with other drug dealers. U.S. v. McIntyre, 997 F.2d 687 (10th Cir. 1993).
10th Circuit upholds enhancement for defendant who took over operation in manager’s absence. (431) The 10th Circuit affirmed a managerial enhancement under section 3B1.1(c) based on defendant’s role in a drug conspiracy during the absence of the conspiracy’s acknowledged manager. One witness testified that when the manager was gone from the house at which drugs were sold, defendant was left in charge of handling the dope and keeping the guns and money. The witness had also seen both defendant and the manager handle the guns. U.S. v. Brown, 995 F.2d 1493 (10th Cir. 1993), overruled on other grounds by U.S. v. Prentiss, 256 F.3d 971 (10th cir. 2001).
10th Circuit upholds leadership enhancement for defendant who “took over” arrangements for acid purchase. (431) The 10th Circuit affirmed that defendant was a leader or supervisor in an acid purchase from an undercover agent. Although the starting point for the purchase was a conversation in state prison between two other conspirators, thereafter, defendant “took over,” having numerous telephone conversations with the agent, arranging the purchase, giving $13,000 to the agent at the scene of the transactions, recruiting another co-conspirator and then assisting in transferring the barrel of acid from agent’s vehicle to the trunk of a co-conspirator. U.S. v. Brantley, 986 F.2d 379 (10th Cir. 1993).
10th Circuit agrees that defendant was leader of kickback scheme. (431) Defendant operated a business that sold products to municipal governments through local purchasing agents. He developed an elaborate scheme under which kickback were paid to purchasing agents in exchange for accepting “fake” products or for paying phony invoices. The 10th Circuit affirmed that defendant was an organizer or leader of the criminal activity. Four of defendant’s salesmen pled guilty to similar charges, and defendant recruited them and instructed them in the scheme. Moreover, four of the municipal purchasing agents also pled guilty to mail fraud or bribery charges as a result of having been drawn into the scheme by defendant. U.S. v. Levine, 983 F.2d 165 (10th Cir. 1992).
10th Circuit affirms managerial enhancement for defendant who recruited teens to bomb a clinic. (431) Defendant recruited several teenagers to bomb a neighboring clinic with which he was having a dispute. The 10th Circuit affirmed a managerial enhancement under section 3B1.1(a). The district court chose to disbelieve defendant’s testimony that he was only responsible for engaging in exaggerated inappropriate comments in front of the teens. After listening to the defendant, the trial evidence and the additional testimony from both sides at the sentencing hearing, the court chose to disbelieve defendant and find he was a manager of a criminal activity involving less than five persons. U.S. v. Guadalupe, 979 F.2d 790 (10th Cir. 1992).
10th Circuit upholds leadership enhancement based on government agent’s hearsay testimony. (431) Defendant received a four level enhancement for being the leader of criminal activity involving five or more participants. The district court properly relied on a government agent’s hearsay testimony concerning the role of one of the alleged participants in the scheme. The agent testified that one witness told him that he was acting under defendant’s direction when he drove a vehicle with defendant and a co-conspirator to a rival’s house. The agent testified that the witness told him that defendant had said they intended to throw pipe bombs at the rival’s house and car. The information was corroborated by defendant’s guilty plea. There was also sufficient evidence that defendant led another co-conspirator. U.S. v. Roach, 978 F.2d 573 (10th Cir. 1992).
10th Circuit upholds leadership enhancement for “hub” of fraud conspiracy. (431) Defendant used credit card information from innocent third parties to purchase airline tickets, which he would then sell for cash. The 10th Circuit affirmed that defendant was the leader of the scheme. Defendant recruited a rental car employee and unidentified others to obtain credit card information. He used other people as sales representatives to obtain ticket orders, which defendant would then fill. Defendant was the “hub on this particular wheel.” U.S. v. Powell, 973 F.2d 885 (10th Cir. 1992).
10th Circuit affirms supervisory enhancement in fraud case. (431) Defendants challenged a two point enhancement under section 3B1.1(c) for their role in their fraud scheme, since the offense was committed “by individuals of roughly equal culpability.” The 10th Circuit upheld the enhancement. The district court was presented with evidence that the offenses involved upward of eight participants. There was ample support for the district court’s finding that defendants were not acting alone, but were instead carrying out a supervisory role over other participants in the offenses. U.S. v. Hollis, 971 F.2d 1441 (10th Cir. 1992).
10th Circuit upholds leadership adjustment for drug source who controlled the manner and place of delivery. (431) Undercover agents negotiated the purchase of cocaine from defendant and a co-defendant. The 10th Circuit upheld an enhancement under section 3B1.1(c) based on defendant’s leadership role in the offense. Throughout the transaction that involved the co-defendant, defendant acted as the “source” and directed the co-defendant’s actions. During the negotiations for the purchase of the cocaine, the co-defendant repeatedly checked with defendant and acted pursuant to the directions that he received from defendant. This evidence demonstrated that defendant controlled both the manner and place of delivery. U.S. v. Hernandez, 967 F.2d 456 (10th Cir. 1992).
10th Circuit affirms leadership enhancement for “moneyman” or “banker” of drug transaction. (431) The 10th Circuit affirmed a four-level enhancement under 3B1.1(a) based upon defendant’s leadership role in a drug transaction. The district court’s findings that five or more participants were involved was not clearly erroneous. There were six co-defendants who were also convicted for their involvement in the transaction. At the plea hearing, defendant admitted that he recruited four of the co-defendants to engage in the transaction. He also did not challenge the allegation that he was the “moneyman” or “banker” referred to in a tape recorded conversation with a police detective, and that he provided transportation and expenses for the individuals he recruited. There was also evidence that defendant engaged in negotiations concerning the transaction and that he took possession of at least seven of the eight boxes of marijuana prior to his arrest. U.S. v. Bernaugh, 969 F.2d 858 (10th Cir. 1992).
10th Circuit upholds consideration of information presented at trial of co-defendants. (431) Defendant contended that in determining he was a leader under section 3B1.1(a), the district court erred by relying in part upon information presented at the trial of his co-defendants. The 10th Circuit upheld the consideration of such information. In making its findings, a district court can use any reliable evidence, including hearsay testimony from a separate trial. U.S. v. Bernaugh, 969 F.2d 858 (10th Cir. 1992).
10th Circuit affirms that defendants, and not their attorneys, were leaders of bankruptcy fraud. (431) Defendants were convicted of various charges stemming from a multitude of acts they committed to defraud their creditors during the course of bankruptcy proceedings. The 10th Circuit affirmed that defendants, and not their attorneys, were the leaders of the fraud scheme. There was evidence that the wife directed the bookkeeper to give sale proceeds and accounts receivable proceeds directly to her so that she could deposit the monies in the law firm trust account, instructed the collector to send monies from the accounts receivable to her home, contacted the pension plan from which they embezzled with directions to convert assets to cash, and established a secret personal bank account into which funds were improperly diverted. The husband instructed the collector to send proceeds from the accounts receivable to their law firm, diverted monies to secret bank accounts controlled by defendants, and redeemed the pension plans’ assets. Although the court did not identify five other participants, that is not necessary when the record plainly shows the existence of these facts. U.S. v. Levine, 970 F.2d 681 (10th Cir. 1992).
10th Circuit affirms leadership role of defendant who recruited juveniles to commit crime. (431) The 10th Circuit affirmed the district court’s decision to enhance defendant’s offense level based upon his leadership role in an armed robbery. The district court found that defendant was “calling the shots and making the decisions and telling them how to go about it.” The court also found that defendant had “recruited a bunch of juveniles, young juveniles” and was “merely using these minors as his minions and had influenced them to assist in carrying out the robbery.” U.S. v. Morgan, 942 F.2d 243 (10th Cir. 1991).
10th Circuit affirms leadership role of defendant who owned business in which marijuana transfers took place. (431) The 10th Circuit affirmed a four-level enhancement based upon the district court’s finding that defendant was a leader or organizer of a marijuana conspiracy. There was evidence that extensive marijuana transfers took place at a business that defendant owned. U.S. v. Cox, 934 F.2d 1114 (10th Cir. 1991).
10th Circuit affirms that five participants were involved in criminal scheme. (431) Defendant argued that there were less than five participants and therefore it was improper to increase his offense level by four under § 3B1.1(a) based on his leadership role. The 10th Circuit rejected the argument, noting that the trial court found five participants: defendant, defendant’s wife, defendant’s daughter and two others. Defendant admitted the two others were involved, but denied his wife and daughter were participants. The 10th Circuit found that the evidence in the presentence report demonstrated by a preponderance that both defendant’s wife and daughter were accomplices in his criminal activity. There was no evidence to the contrary. U.S. v. Walker, 931 F.2d 631 (10th Cir. 1991).
10th Circuit affirms leadership role for defendant who organized company used to commit fraud. (431) The 10th Circuit affirmed the determination that defendant had a leadership role in a criminal scheme to obtain fraudulent bank loans. The record indicated that defendant gave orders, came up with ideas, handled the finances, and organized the business entity doing business with the victim banks. U.S. v. Kelley, 929 F.2d 582 (10th Cir. 1991).
10th Circuit upholds leadership role for defendant who conducted negotiations with undercover agents. (431) The 10th Circuit upheld the district court’s determination that defendant had a managerial or leadership role in a drug operation. The record indicated that defendant was involved in extensive negotiations with undercover agents and controlled the place and timing of drug transactions. He also asked the undercover agents, posing as buyers, to go directly through him to make their purchases. U.S. v. Gonzales, 930 F.2d 795 (10th Cir. 1991).
10th Circuit holds that arranging for “mule” to deliver cocaine made defendant a “supervisor.” (431) Defendant arranged for a “mule” to deliver cocaine to an undercover agent, and was arrested after selling cocaine to the agent before the mule arrived. Defendant argued that the sentencing court determined he was an organizer based on “future” criminal activity. The 10th Circuit rejected the argument, ruling that “[R]ecruiting and instructing an accomplice to transport drugs creates a permissible inference that the defendant’s role had been transformed from strictly individual to supervisory.” Additionally, defendant admitted through counsel that he had a “mule” working for him. U.S. v. Rutter, 897 F.2d 1558 (10th Cir. 1990).
10th Circuit upholds finding that defendant was organizer of crime even though he committed theft alone. (431) Defendant single-handedly broke into a terminal and stole certain goods, which he gave to a fence to sell. He then retrieved the unsold goods from the fence. Defendant argued that it was improper to find that he was an organizer because he was the only participant in the crime. The 10th Circuit rejected this argument, finding that the fact that defendant was a key participant in the crime, recruited the fence to sell the goods, and exercised control over the stolen goods supported the finding that defendant was an organizer of the crime. U.S. v. Johnson, 911 F.2d 403 (10th Cir. 1990).
10th Circuit holds that defendant may be both broker and organizer of transaction. (431) Defendant’s offense level was increased by two levels based on his role as an organizer of a drug transaction. The 10th Circuit rejected defendant’s argument that his role as a “broker” of the deal precluded a finding that he was also an organizer. Given defendant’s responsibility for the location of the transaction, that he recruited and negotiated for the seller, and that the transaction would not have occurred, or would have occurred elsewhere without his involvement, the district court’s finding was not clearly erroneous. U.S. v. Alvarado, 909 F.2d 1443 (10th Cir. 1990).
10th Circuit upholds finding that defendant was a “manager.” (431) The defendant directed an informant to set up a drug transactions with an undercover officer. He controlled the source of narcotics to all involved individuals, personally met with the undercover agent and alone received the money in exchange for the cocaine. He also directed another person to rent an apartment, an automobile, and various telephone pagers for his use. The 10th Circuit held that these facts were more than sufficient to support a finding of manager status. The court also rejected the defendant’s arguments that the terms organizer, leader, manager, supervisor, and criminal activity as used in § 3B1.1(c) were unconstitutionally vague. The court found that a plain reading of that provision is capable of being widely understood by members of the general public, and therefore did not violate the due process clause. U.S. v. Mays, 902 F.2d 1501 (10th Cir. 1990).
10th Circuit upholds defendant’s leadership role based upon associate’s subordinate role. (431) The 10th Circuit upheld the district court’s characterization of defendant as a leader or an organizer under guideline § 3B1.1. The evidence demonstrated that an associate provided “doorman” services to defendant at the apartment from which defendant distributed cocaine. The associate would also sell the cocaine himself when defendant was not present at the apartment, but never when the defendant was at the apartment. This evidence alone was sufficient to support the district court’s conclusion that defendant was a leader or organizer. However, the fact that defendant was a source for other customers who resold the cocaine was not sufficient evidence to include defendant’s customers in the list of those controlled by defendant, in the absence of evidence that defendant exercised any authority, direction or control over his customer’s resale of the cocaine. U.S. v. Moore, 919 F.2d 1471 (10th Cir. 1990).
10th Circuit upholds finding that defendant was an organizer or leader. (431) Defendant argued on appeal that the district court erred in finding defendant was an “organizer or leader” of a criminal activity. The 10th Circuit held that the evidence was sufficient to justify a four point increase in defendant’s base offense level under § 3B1.1(a). The defendant began the conspiracy with one other individual and it grew to include others; defendant asked a co-defendant to find other individuals and directed the co-defendant to rent space for lab equipment used to manufacture methamphetamine; several “cooks” took place at defendant’s house under defendants supervision; defendant was entitled to a share of the finished product; and defendant continued to manufacture methamphetamine after his original “partner” was arrested. Because these facts were not clearly erroneous, an increase was justified. U.S. v. Beaulieu, 893 F.2d 1177 (10th Cir. 1990).
11th Circuit holds that defendant held leadership role in bribery scheme. (431) Defendant co-owned a telecommunications company that purchased phone time from foreign vendors and resold the minutes to customers in the United States. He and his co-owner bribed officials of the Haitian company in return for reduced bills, and were convicted of conspiracy to violate the Foreign Corrupt Practices Act (FCPA). The district court found that defendant was an organizer or leader of criminal activity involving five or more participants, and applied a four-level leadership increase under § 3B1.1. Defendant argued that he was a leader only in his company’s legitimate business operations and pointed to the substantial independent roles of others in the bribery scheme. The Eleventh Circuit upheld the leadership enhancement. The roles of defendant’s co-conspirators did not change the analysis, even if they also played major roles in the offense. The district court found that defendant was “in charge” of the bribery, served as “the boss of [co-conspirator] Rodriguez in addition to the others,” and “was in fact the leader of the organization, and not just the president in name” because “he actually participated in many of the decisions” involving the bribery scheme. The court’s fact-findings were not clearly erroneous. U.S. v. Esquenazi, 752 F.3d 912 (11th Cir. 2014).
11th Circuit upholds leadership role for sending debt collectors to obtain money from customer. (431) Defendant challenged for the first time on appeal the district court’s finding that defendant held a leadership role in the marijuana conspiracy, but the Eleventh Circuit ruled that the record adequately supported the enhancement. One of defendant’s marijuana customers, Smith, testified about debt collectors defendant directed to obtain drug-debt payments from him. Although Smith could only testify that it was “understood” that defendant sent the collectors, the circumstances of the debt collection—namely, that Smith had purchased marijuana from defendant and owed a drug debt to him—supported the inference that defendant sent those individuals to collect Smith’s debt for him. In fact, Smith recognized one of the collectors from a previous occasion hen he purchased marijuana from defendant. U.S. v. Villarreal, 613 F.3d 1344 (11th Cir. 2010).
11th Circuit approves managerial role increase for defendant near top of fraud hierarchy. (431) Defendant was convicted of numerous counts of conspiracy and fraud based on his participation in a scheme to sell fraudulent workers’ compensation insurance. The Eleventh Circuit upheld a three-level managerial role enhancement. Defendant was situated near the top of the hierarchy of the overall scheme. He was the business partner of the other main conspirator, and was in contact with the owner of the fraudulent insurance company. Defendant participated in the negotiations between the professional employer organizations (PEOs), including the meeting in which the fraud was developed, and later issued the policies and misleading certificates of insurance to the PEOs to pass along to their clients. Based on defendant’s extensive involvement in the development and operation of the scheme, the district court did not clearly err. U.S. v. Jennings, 599 F.3d 1241 (11th Cir. 2010).
11th Circuit holds that defendant who recruited, paid, and instructed smugglers, held leadership role. (431) Defendant was involved in an attempt to smuggle 11 Chinese nationals into the U.S. in a fishing boat. Defendant argued that he was not an organizer or a leader of the criminal activity because he merely owned the boat used to smuggle the aliens. The Eleventh Circuit held that the district court did not clearly err in applying a leadership enhancement. The government presented evidence that defendant recruited Lopez to participate in the smuggling operation; the smugglers met at defendant’s home to discuss the crime; defendant gave Lopez and Miranda specific instructions on how to commit the crime; defendant had Lopez and Miranda sign a contract agreeing to tell a fabricated story to authorities if they were caught; defendant contacted Miranda and Lopez 39 times by telephone during the smuggling trip; and defendant financed the trip, and agreed to pay Lopez $7,000 for his role in the smuggling venture. U.S. v. Caraballo, 595 F.3d 1214 (11th Cir. 2010).
11th Circuit holds that defendant held aggravated role in counterfeit goods scheme. (431) Defendant was convicted of trafficking in counterfeit cell phone parts and accessories. The Eleventh Circuit affirmed a § 3B1.1(c) leadership increase based on evidence that defendant negotiated the sale of counterfeit products to the undercover agents, instructed another employee to engage in counterfeit sales, and, when defendant’s brother (the owner of the company) was absent, was in charge of the company, its sales, and its warehouse. Although defendant did not have any decision-making authority and did not facilitate the purchase of counterfeit goods from China, he was “intricately involved in the offense.” U.S. v. Lozano, 490 F.3d 1317 (11th Cir. 2007).
11th Circuit finds employees who knowingly furthered fraud were participants. (431) Defendant, along with three corporate defendants, committed a number of mail fraud and tax evasion offenses. Defendant challenged a § 3B1.1 (b) supervisory role enhancement, arguing that there were no other participants in the scheme. The Eleventh Circuit disagreed, holding that the employees of the corporate defendants were also participants in the scheme. Employees are participants for purposes of the § 3B1.1 increase when they knowingly further the fraudulent scheme. Here, the employees of one local newspaper that defendant published knew the actual circulation numbers and actively informed advertisers of inflated numbers. Employees of another corporation assisted the fraud by writing checks either to themselves, fellow employees, or to “cash” and then giving the money to defendant. Their efforts to channel money to third parties demonstrated that they knew that giving the money to defendant was improper. Further, defendant’s daughter was indicted for her role in the fraud and pled guilty to tax charges related to the scheme. U.S. v. Walker, 490 F.3d 1282 (11th Cir. 2007).
11th Circuit holds that the court clearly erred in refusing to find that Medicaid fraud was “extensive.” (431) Defendant, a private health care consultant, was involved in a Medicare fraud scheme designed to hide the “related party” status of corporations providing goods and services to home health agencies. The Eleventh Circuit held that the district court erred in refusing to find that the scheme was “extensive” for purposes of a § 3B1.1(a) leadership increase. The criminal activity was “quite complex” and was not, as defendant suggested, as simple as the failure to check a box on a Medicare form. The record showed extensive criminal activity involving seven corporations, numerous straw owners, Medicare reimbursements of over $15 million, and repeated failure to disclose related party status over a seven-year period. U.S. v. Gupta, 463 F.3d 1182 (11th Cir. 2006).
11th Circuit holds that enhancements for captain and leadership role was not double counting. (431) Defendant argued that the district court misapplied the Sentencing Guidelines by enhancing his sentence for being the captain of a vessel, § 2D1.1(b) (2)(B), and for being the organizer or leader of criminal activity, § 3B1.1. The Eleventh Circuit held that the two enhancements were proper. There was no dispute that defendant was sought to captain the go-fast boat carrying the drugs because he possessed documentation identifying him as the captain of a fishing vessel and that he was the captain and operated the boat. In addition to being the captain, defendant knew the destination of the boat for the delivery of the cocaine. He was following the instructions of the drug dealers as to the delivery. He was also in charge of his four co-defendants on the go-fast boat and oversaw one co-defendant as he drove the go-fast boat for three to six hours as well as directed him to change a fuel tank. Under U.S. v. Rendon, 354 F.3d 1320 (11th Cir. 2003), the two enhancements were not double counting. The two enhancements embody “conceptually separate notions relating to sentencing” because they are designed for two different purposes, and neither the guideline nor its commentary suggested they may not be applied cumulatively. U.S. v. Ramirez, 426 F.3d 1344 (11th Cir. 2005).
11th Circuit holds that defendant who recruited others to receive fraudulent social security cards held managerial role. (431) The ringleader of a Social Security fraud paid a Social Security employee to fraudulently issue Social Security numbers to illegal aliens based on fraudulent immigration documents. Defendant and others acted as middlemen between the leader and aliens seeking Social Security numbers. Defendant would negotiate a rate in excess of the fee he paid the leader for the forged documents. He also provided transportation for the aliens to the Social Security office and instructed his customers to deal with the cooperating employee. The cards were mailed to defendant and two other individuals he recruited to receive the cards and later distributed. The Eleventh Circuit affirmed a § 3B1.1(b) leadership increase. Defendant enjoyed the lion’s share of the profits and the discretion to set the prices paid by customer above the fee paid to the leader. He recruited two individuals to receive the cards so that he could distribute them to his customers and reduce the risk of detection. Without them, defendant would have been forced to draw more attention to himself by directly all of the cards to his address. U.S. v. Njau, 386 F.3d 1039 (11th Cir. 2004).
11th Circuit holds that defendant was leader of drug smuggling ring. (431) Defendant and other crew members of a so-called “go-fast” boat were intercepted by the Coast Guard after dumping a large amount of cocaine into the water. Two crew members testified that defendant hired them for the trafficking trip; one testified that defendant operated the go-fast boat until it met two other boats from which defendant received the cocaine shipment; defendant was the only person who knew where the cocaine was to be delivered; and defendant instructed crew members to throw the cocaine overboard when a Navy plane was spotted overhead. One crew member also testified that there were at least eight conspirators involved with the conspiracy over whom defendant exercised control. Consequently, the Eleventh Circuit ruled that the district court properly imposed a four-level leadership increase under § 3B1.1(a). U.S. v. Rendon, 354 F.3d 1320 (11th Cir. 2003).
11th Circuit holds that captain and leadership increases were not double counting. (431) Defendant and other crew members of a so-called “go-fast” boat were intercepted by the Coast Guard after dumping a large amount of cocaine into the water. The Eleventh Circuit rejected defendant’s claim that a captain increase under § 2D1.1(b)(2)(B) and a leadership increase under § 3B1.1(a) was improper double counting. Neither of the two sentencing factors is a subset of the other. A defendant may captain a craft or vessel without serving as an organizer or leader in the overall conspiracy. Likewise, a defendant may be an organizer or leader of a drug conspiracy without having anything to do with the actual operation of the vessel used to transport the drugs. Absent an instruction to the contrary, the adjustments from different guideline sections are applied cumulatively. U.S. v. Rendon, 354 F.3d 1320 (11th Cir. 2003).
11th Circuit remands for consideration of whether defendant who received aggravated role enhancement can also receive mitigating role reduction. (431) Defendant (1) actively recruited two individuals to transport drugs, (2) arranged for one of those recruited individuals to transport cocaine, (3) directly paid at least one of those individuals for transporting cocaine, and (4) was, in turn, paid for his recruitment and supervision of individuals in that drug conspiracy. Therefore, the district properly assessed defendant an aggravated role enhancement under § 3B1.1(c). However, defendant also argued that he played a minor role in the offense. In response, the government assumed, without citation or analysis, that if the leadership enhancement was proper, then defendant could not also receive a minor role reduction. The government did not discuss two cases addressing this issue, both which reached a contrary conclusion. See U.S. v. Tsai, 954 F.2d 155 (3d Cir. 1992); U.S. v. Jackson, 207 F.3d 910 (7th Cir. 2000), rev’d on other grounds, 531 U.S. 953 (2000). But see U.S. v. Conley, 156 F.3d 78 (1st Cir. 1998) (managerial role is “fundamentally inconsistent with minor or minimal role). The Eleventh Circuit has not addressed this issue, and it was unclear whether the district court, in refusing to grant the minor role reduction, even considered it. The case was remanded to the district court “for consideration of both the legal and factual issues concerning the defendant’s request for a minimal or minor role reduction.” U.S. v. Perry, 340 F.3d 1216 (11th Cir. 2003).
11th Circuit says that in two-person conspiracy, both conspirators may play aggravating role. (431) Defendant was involved in a fraud scheme under which he obtained prescription drugs from its manufacturer at a discount price by misrepresenting to whom his company would be reselling the drug. He challenged a § 3B1.1(c) leadership increase, arguing that because he and Powell, his employer, were the only ones indicted for the conduct, and because Powell had already received a role enhancement for his involvement, defendant was not eligible for the increase. The Eleventh Circuit held that when a conspiracy involves only two participants, each participant can be an “organizer, leader, manager or supervisor” in the criminal conduct when each participant takes primary responsibility for a distinct component of the plan and exercises control or influence over the other participant with respect to that distinct component. The record was replete with instances in which defendant directed or organized Powell in the conduct of certain elements of the criminal scheme. The fact that Powell may have received an adjustment at his sentencing did not bar defendant from also receiving an adjustment. U.S. v. Yeager, 331 F.3d 1216 (11th Cir. 2003).
11th Circuit says court clearly erred in failing to apply leadership increase. (431) Defendant was convicted of wire fraud based on his role in corrupting the process by which a county selected an underwriter for a bond project. His company paid the county’s financial advisor a fee to recommend that the county select defendant’s company for the project. The Eleventh Circuit held that the district court clearly erred in failing to impose a § 3B1.1 leadership increase. The trial evidence established that defendant supervised Eaton at the company, and that he authorized Eaton to make the corrupt payoff to a person who passed half the money on to the county advisor. Thus, Eaton was a participant in the criminal activity, and defendant was his superior, his supervisor, and his manager. The district court did not find to the contrary, but instead simply and inexplicably failed to apply the increase. U.S. v. Poirier, 321 F.3d 1024 (11th Cir. 2003).
11th Circuit upholds leadership increase for defendant with decision-making authority. (431) Defendant argued that co-conspirator Ruiz was the leader of the drug conspiracy, and thus, the court erred in imposing a four-level increase pursuant to § 3B1.1(a). The Eleventh Circuit found that the evidence supported the increase. Defendant directed the movement of cocaine from one house to another and continually gave orders to a cooperating witness, Ruiz and the undercover agents. The recorded conversations showed that Ruiz consulted with defendant on all of his plans, and that defendant gave the undercover agents detailed instructions for transporting the drugs. Defendant also spent a significant amount of time planning and organizing the building of hiding places, ordering the movement of co-conspirators, and overseeing the distribution of the drugs. Defendant had decision-making authority and exercised control. U.S. v. Suarez, 313 F.3d 1287 (11th Cir. 2002).
11th Circuit rules that defendant held leadership role in extortion. (431) Defendant was convicted of extortion charges after he and his co-conspirators forced the owners of a nightclub to sign over ownership of the club to the conspirators. The Eleventh Circuit affirmed a § 3B1.1 leadership increase based on evidence that defendant: (1) gave orders to others involved with the conspiracy; (2) arranged for all of the security at the club the night of the extortion and planned on handling security after they took control of the club; and (3) arranged for the notary to sign the papers that night. Moreover, one conspirator testified that defendant was one of his bosses. U.S. v. Vallejo, 297 F.3d 1154 (11th Cir. 2002).
11th Circuit holds that defendant was leader of bank robbery scheme. (431) The Eleventh Circuit found abundant evidence to support the district court’s finding that defendant was an organizer and leader of the bank robbery, including (1) both co-defendants testified that defendant did most of the planning and preparation for the robbery, including selecting the bank; (2) one co-defendant testified that defendant first suggested the idea of a bank robbery, selected the bank because it was located in a small town with little police presence, and provided the guns; (3) another conspirator testified that defendant agreed to “take care of all the details,” purchased the ski masks and bags for use in the robbery, and gave her a gun and showed her how to use it; (4) defendant himself testified that he purchased the police scanner and the guns for use in the robbery and helped draw a diagram of the bank; and (5) during the robbery, defendant waited in the get-away car and monitored the police scanner while his two co-defendants committed the robbery. U.S. v. Phillips, 287 F.3d 1053 (11th Cir. 2002).
11th Circuit finds control over one person made drug supplier a supervisor. (431) Defendant argued that his role as a drug supplier did not automatically make him a “supervisor” under § 3B1.1(c). The Eleventh Circuit found that defendant’s control or influence over Sims was sufficient to support the increase. Two witnesses testified that Sims had to consult with defendant before agreeing to sell drugs, and some of the taped conversations also indicated that Sims would consult with defendant (who could be heard in the background) when discussing the drug transactions on the telephone. The district court did not clearly err in finding that defendant had control or influence over Sims during the course of the conspiracy. U.S. v. Jiminez, 224 F.3d 1243 (11th Cir. 2000).
11th Circuit holds leadership increase properly based on defendant’s role in over-all RICO conspiracy. (431) Defendant directed a RICO organization involving numerous illegal activities, including the manufacture and distribution of methamphetamine. The district court divided his convictions into seven groups for sentencing. He argued that a § 3B1.1(a) leadership increase to the drug conspiracy group was improperly based on his role in the overall RICO conspiracy; there was no evidence that he was a leader of the methamphetamine conspiracy. The Eleventh Circuit, agreeing with U.S. v. Damico, 99 F.3d 1431 (7th Cir. 1996), ruled that it is appropriate to judge a RICO defendant’s role in the offense with respect to the overall RICO conspiracy for the purpose of applying a § 3B1.1(a) enhancement. “[T]he predicate by predicate approach of [USSG § 2E1.1] applies … only for the purpose of establishing a RICO defendant’s base offense level, and not for the purpose of applying the Chapter Three adjustments.” The sentencing court never determined that defendant was a leader or organizer of the drug conspiracy. Instead, the court applied the adjustments set forth in Parts A, B, and C of Chapter Three to the drug count. See USSG § 1B1.1(c). U.S. v. Yeager, 210 F.3d 1315 (11th Cir. 2000).
11th Circuit finds defendant had leadership role in drug importation conspiracy. (431) Defendant recruited a confidential informant to travel to Costa Rico to pick up cocaine and deliver the cocaine to the U.S. for distribution. When the cocaine was “stolen” by DEA agents, three men invaded the informant’s house in an effort to recover the cocaine. The Eleventh Circuit affirmed a leadership enhancement, finding more than sufficient evidence of defendant’s involvement and participation in the drug conspiracy and home invasion. In addition to defendant’s confession, the informant testified that defendant was the one who contacted her about the drug importation and distribution scheme. The government introduced transcribed recordings between defendant and the informant concerning the illegal activity. U.S. v. Gonzalez, 183 F.3d 1315 (11th Cir. 1999).
11th Circuit says enhancement was not based on information obtained in violation of agreement. (431) The Eleventh Circuit ruled that a § 3B1.1(c) managerial enhancement was not improperly based on information obtained in violation of the government’s promise not to use certain information provided by defendant. The enhancement was based on statements made by two cooperating co-conspirators before defendant’s arrest. These statements indicated that both co-conspirators were recruited by and were delivering drugs for defendant. U.S. v. Shazier, 179 F.3d 1317 (11th Cir. 1999).
11th Circuit says use of runners to sell cocaine supported managerial role enhancement. (431) Defendant argued that he should not have a received a managerial role enhancement because he did not have control over others or the power to force them to engage in criminal acts. The Eleventh Circuit affirmed the § 3B1.1(b) enhancement based on defendant’s use of “runners” to sell cocaine. Defendant fronted or directly sold cocaine to numerous runners who would then sell the drug to buyers along a certain road, giving defendant the resulting profit. In exchange for this service, the runners would generally be entitled to a small amount of cocaine for their own personal use. This undisputed activity was sufficient to justify the § 3B1.1(b) enhancement. U.S. v. Matthews, 168 F.3d 1234 (11th Cir. 1999).
11th Circuit upholds leadership enhancement for operator of health care provider that submitted false Medicare claims. (431) Defendant was the owner and chief executive officer of a home health care provider that submitted falsified Medicare claims to a fiscal intermediary. The Eleventh Circuit found sufficient support for a § 3B1.1(c) enhancement for her aggravated role in the crime. In one instance, defendant instructed the company’s in-house attorney to contact employees to solicit contributions for specific political candidates. The attorney collected the political contributions and gave them to defendant, who dispensed the money to the candidates. The employees who made political contributions were later reimbursed through the company’s payroll. Those payroll expenditures were then submitted for Medicare reimbursement and falsely identified as employee bonuses. Defendant’s direction of the attorney supported the court’s conclusion that the attorney was a participant in defendant’s scheme within the meaning of § 3B1.1. U.S. v. Garrison, 133 F.3d 831 (11th Cir. 1998).
11th Circuit rules defendant was manager of credit card fraud conspiracy. (431) Defendant pled guilty to a RICO conspiracy for a scheme in which, using phony credit cards, the conspirators made large purchases of expensive goods from luxury stores. The Eleventh Circuit affirmed a managerial role enhancement since defendant’s fingerprints appeared on the package of blank credit cards, he participated in multiple purchases of items, he drove to pick up the stamp press (the vital item in the production of false cards), he lived with the ringleader, and he had participated in their prior credit card fraud offenses. U.S. v. Wai-Keung, 115 F.3d 874 (11th Cir. 1997).
11th Circuit affirms managerial role and rejects minor role for drug smugglers. (431) Defendants were involved in a conspiracy to smuggle cocaine into the U.S. from Colombia. The Eleventh Circuit upheld managerial role enhancements for two defendants and rejected a minor role reduction for a third. The first defendant deserved the § 3B1.1 enhancement because he had an extensive role in coordinating every aspect of the transaction. The second defendant coordinated the entire Colombian end of the conspiracy, informed the parties of the location of cocaine, and provided replacement container seals to divert suspicion. The third defendant did not deserve a minor role reduction because he participated in most of the meetings regarding the scheme and transported and unloaded the cocaine once it arrived in the U.S. U.S. v. Bueno‑Sierra, 99 F.3d 375 (11th Cir. 1996).
11th Circuit says more than minimal planning and leadership enhancements are not double counting. (431) Defendant managed and operated a telemarketing scam. He argued that the cumulative application of the more than minimal planning enhancement of § 2F1.1(b)(2) and the managerial enhancement of § 3B1.1(b) constituted improper double counting. The Eleventh Circuit disagreed. Double counting a factor during sentencing is permitted if the Sentencing Commission intended that result and each guideline section concerns conceptually separate notions relating to sentencing. Nothing in § 2F1.1 or § 3B1.1 suggests an intent not to apply the sections cumulatively. In addition, the two enhancements address different considerations. The more than minimal planning enhancement describes the complexity of the overall scheme. The leadership enhancement addresses the offender’s role within the group of co-conspirators. A November 1993 amendment to note 4 of § 1B1.1 also shows the Commission’s intent to apply the enhancements cumulatively. U.S. v. Stevenson, 68 F.3d 1292 (11th Cir. 1995).
11th Circuit finds defendants were co-organizers of plan to transport precursor chemical. (431) Defendants were involved in a scheme to transport phenylacetic acid (“PA”), a listed precursor chemical used in the manufacture of methamphetamine, from Florida to Oregon. The Eleventh Circuit agreed that defendants were co-organizers of the scheme. One defendant recruited a dealer to acquire and transport the PA by offering the dealer discount prices on methamphetamine. He also instructed the dealer on how to repackage the PA for the trip back to Oregon and collected the PA from the dealer upon his return. The other defendant provided funding for the endeavor and gave the dealer money for attorneys’ fees after his arrest. Both defendants monitored the dealer’s progress in Florida. In addition, both defendant stood to profit more than the others from the conspiracy. U.S. v. Ramsdale, 61 F.3d 825 (11th Cir. 1995).
11th Circuit holds that defendant was a leader in attack on government witness. (431) Defendant and other inmates at a county jail beat up another prisoner when they learned he was to testify against a mutual friend. The Eleventh Circuit agreed that defendant was a leader in the attack on the informant. Defendant had a close, brother-like relationship with the friend, he made several phone calls to the friend to learn about defendant’s testimony, he moved around the cell to talk to the other inmates, summoned the informant to the back of the cell, and was the first to accuse the informant of testifying against the friend. U.S. v. Tapia, 59 F.3d 1137 (11th Cir. 1995).
11th Circuit upholds leadership enhancement for defendant who received “lion’s share” of cocaine. (431) Defendant was involved in a conspiracy to import 300 kilograms of cocaine into the United States. The Eleventh Circuit upheld a leadership enhancement based on two factors. First, defendant received the “lion’s share” of the cocaine. Second, when undercover agents unexpectedly notified the conspirators that the plane carrying the cocaine had landed at a U.S. airport, the conspirators could not decide how to retake the cocaine until defendant arrived. Each factor was properly considered under note 4 to § 3B1.1. U.S. v. Delgado, 56 F.3d 1357 (11th Cir. 1995).
11th Circuit agrees that defendant who arranged drug deal was manager. (431) Defendant and others were arrested while selling drugs to an informant. The 11th Circuit approved a managerial enhancement under § 3B1.1(c) since defendant negotiated the price of the cocaine and made arrangements for the drug transaction. U.S. v. Stanley, 24 F.3d 1314 (11th Cir. 1994).
11th Circuit upholds managerial role for defendant who delivered crack and collected money. (431) The 11th Circuit upheld a managerial enhancement under section 3B1.1(b) based on evidence that defendant “really ran everything,” wore a beeper, and that she delivered crack cocaine to, and collected money from, the street workers who sold the cocaine. U.S. v. Beasley, 2 F.3d 1551 (11th Cir. 1993).
11th Circuit upholds leadership enhancement where defendant did not challenge conclusion that scheme was otherwise extensive. (431) Defendant and others contacted potential victims by phone, advised them they had won a large cash prize, and then persuaded the victims to wire them money to pay taxes on the prize. The 11th Circuit upheld an enhancement under section 3B1.1(a) for being a leader or organizer of a criminal activity that involved five or more participants or was otherwise extensive. Although defendant challenged the district court’s conclusion that five or more participants were involved, he did not challenge its conclusion that the fraud scheme was otherwise extensive. Thus, the finding of five participants was unnecessary to support the enhancement. U.S. v. Hall, 996 F.2d 284 (11th Cir. 1993).
11th Circuit says organization that extended from Colombia to New York was “otherwise extensive.” (431) The 11th Circuit rejected defendant’s challenge to an enhancement under section 3B1.1(a), affirming that defendant was involved in an “otherwise extensive” criminal organization. Defendant was organizing a drug transaction that extended from Colombia to Florida to Boston to New York, and which included the purchase and street distribution of 100 kilos of cocaine worth $350,000 in the wholesale market. The consideration of drug quantity was not double counting. Drug amount does not establish an extensive organization, but when added to an already existing organization, it can determine whether the operation is extensive. The drug amount helps define the scope of the illegal activity. U.S. v. Rodriguez, 981 F.2d 1199 (11th Cir. 1993).
11th Circuit affirms that defendants were leaders of drug conspiracy involving more than five participants. (431) The 11th Circuit affirmed that defendants were leaders or organizers of a drug conspiracy involving more than five participants. In order to be considered an organizer or leader within the meaning of the guidelines, the defendant need not be the sole leader or a kingpin of the conspiracy. Evidence at trial indicated that both defendants exercised decision-making authority and control over the operation, and traveled either by themselves or with other individuals to southern Florida to meet their drug sources. The district court found that the drug organization was somewhat extensive and involved more than five individuals. U.S. v. Revel, 971 F.2d 656 (11th Cir. 1992).
11th Circuit affirms leadership role of defendant who directed informant’s drug distribution. (431) The evidence revealed that defendant, a co-conspirator in a drug ring, financed the apartment from which a co-conspirator-turned-government-informant sold drugs, subsequently arranged for a roommate to help the informant with the drug sales, had drugs delivered to the apartment, collected the proceeds from the drug sales, and planned and executed trips to obtain drugs. The 11th Circuit affirmed that this was sufficient evidence to justify a two level enhancement under guideline section 3B1.1(c) for being a manager or supervisor. That the co-conspirator was a government informant did not make the enhancement inapplicable, since the co-conspirator was an active member in the drug operation before he became a government agent, and thereafter continued to operate in the same capacity as far as defendant was concerned. U.S. v. Griffin, 945 F.2d 378 (11th Cir. 1991).
11th Circuit affirms supervisor enhancement for defendant who ran “stash” house. (431) The 11th Circuit affirmed that defendant’s receipt of cocaine at a stash house, his distribution of it to distributors, and his supervisorial role over the house adequately supported the finding that he was a supervisor. U.S. v. Clavis, 956 F.2d 1079 (11th Cir. 1992).
11th Circuit upholds supervisor enhancement for bookkeeper of drug conspiracy. (431) The 11th Circuit upheld a supervisorial enhancement for a defendant who was the bookkeeper for a large cocaine conspiracy. Defendant approached the building manager of a house which the conspiracy rented and hired the manager to become a member of the organization and to receive cocaine shipments in the parking lot and deliver them to the rented house. Defendant delivered shipments to the manager at the parking lot, and the manager in turn delivered them to others. U.S. v. Clavis, 956 F.2d 1079 (11th Cir. 1992).
11th Circuit upholds leadership role of defendants who engineered escape attempt. (431) Defendant and his brother were involved in a conspiracy to free the brother from federal prison. Defendant contended that he served a relatively minor role, acting only as his brother’s messenger. In contrast, the government contended that defendant supervised the other co-conspirator’s activities, provided all of the necessary cash, engaged in frequent coded telephone conversations with his brother and directed the escape operations from the outside. The 11th Circuit affirmed a four-level increase under guideline section 3B1.1(a) for both defendant and his brother based upon their leadership role in the escape scheme. The district court’s factual findings concerning their roles in the offense were not clearly erroneous. U.S. v. Kramer, 943 F.2d 1543 (11th Cir. 1991).
11th Circuit finds defendant who sold cocaine on credit exercised managerial control over buyer. (431) The district court increased defendant’s offense level by three for his managerial role in the offense. This was based on the fact that defendant “fronted” cocaine to his buyer, who in turn sold the drug and turned the money over to defendant in payment for the cocaine. The district court noted that but for the credit that defendant was willing to extend, the buyer would not have been able to purchase cocaine to sell to others. As a source of credit, defendant maintained at least constructive control over his buyer. The 11th Circuit found that this factual conclusion was not clearly erroneous, and affirmed the increase. U.S. v. Howard, 923 F.2d 1500 (11th Cir. 1991).
11th Circuit affirms leadership role of defendant who arranged sale of counterfeit money. (431) Defendant was approached in Florida by another individual who asked defendant to accompany him to Canada to distribute counterfeit money. Defendant instead offered to distribute the money in Florida, and then arranged to sell a substantial amount of the currency in Florida. The 11th Circuit upheld a determination that defendant was a leader or an organizer. Defendant made the arrangements to sell the money in Florida and had complete responsibility for its sale. Defendant also enlisted the aid of another individual as an accomplice. U.S. v. Hendrieth, 922 F.2d 748 (11th Cir. 1991).
11th Circuit affirms that defendant who attempted to evade Coast Guard was manager. (431) Defendant and others were arrested by the Coast Guard on a boat containing 495 bales of marijuana. When the Coast Guard initially approached the boat, the boat ignored the Coast Guard’s attempts to communicate and attempted to move away. At some point in the encounter, defendant, the first mate of the boat, emerged from the pilothouse and motioned for the Coast Guard vessel to move out of the boat’s way. The district court concluded that defendant’s act of motioning the Coast Guard vessel to move away during its pursuit made defendant more culpable than the rest of the crew, who remained in the background during the pursuit. The 11th Circuit agreed, finding that defendant’s actions might evidence a greater degree of control over the criminal enterprise and some degree of decision-making authority. U.S. v. Castillo-Valencia, 917 F.2d 494 (11th Cir. 1990).
11th Circuit upholds increase for role in the offense. (431) Defendant supervised a marijuana cultivation crew, received and paid for supplies of methamphetamine, provided armed cover in drug transactions and helped arrange to cover-up the identity of the true owner of a marijuana farm. Although defendant was subordinate to a co-defendant in the over-all conspiracy, the 11th Circuit held that these facts justified a 3-level increase under guideline § 3B1.1(b) for role in the offense. U.S. v. Smith, 893 F.2d 1269 (11th Cir. 1990).
11th Circuit upholds aggravating role in drug offense. (431) Defendant’s sentence was properly enhanced by two levels under § 3B1.1(a) because of his aggravating role in the offense. Defendant found a seller, set the price of the cocaine and determined a time and location for the sale. U.S. v. Otero, 890 F.2d 366 (11th Cir. 1989).
11th Circuit holds that role as supplier and decision-maker justified role in offense enhancement. (431) The 11th Circuit affirmed a two point enhancement of a drug defendant’s base offense level under § 3B1.1(c) (manager or supervisor). The court stated without elaborate discussion that the trial court’s finding that the defendant was a supplier and decision-maker in the marijuana distribution scheme was not clearly erroneous, and therefore the enhancement was proper. The court stated that these facts alone justified the enhancement, and the trial court need not have considered evidence relating to counts for which the defendant was acquitted (or not charged) to determine the propriety of the enhancement. U.S. v. Clark, 889 F.2d 1056 (11th Cir. 1989).
D.C. Circuit agrees that defendant was high-level participant in bank fraud scheme. (431) Defendant participated in a bank fraud scheme. At sentencing, an FBI agent explained that in this type of bank fraud, high-level participants typically controlled the fraudulent bank accounts, checkbooks and debit cards and were responsible for funding the accounts. Low-level participants, often referred to as “runners,” were typically recruited by high-level participants to do the front-line work of cashing fraudulent checks. The agent further testified that defendant recruited runners to the conspiracy. One runner, Awa, was caught on camera cashing three fraudulent checks, and the agent testified that, according to Awa, defendant gave Awa the checks, told him to cash them and paid him between $500 and $1,000 for his effort. The district court credited the FBI agent’s testimony and concluded that defendant was at least a manager or supervisor. The D.C. Circuit agreed. By recruiting others to the scheme, defendant ensured that he would not perform the risky task of cashing a fraudulent check but would instead supervise underlings. His recruitment of runners satisfied one of the application note factors, and his supervision of Awa’s check-cashing demonstrated decision-making authority and control exercised over others. U.S. v. Olejiya, __ F.3d __ (D.C. Cir. June 10, 2014) No. 12-3082.
D.C. Circuit upholds reliance on FBI agent’s testimony to support § 3B1.1 increase. (431) Defendant participated in a bank fraud scheme. The D.C. Circuit upheld a § 3B1.1 organizer or leadership enhancement. Defendant stipulated that he had access to the scheme’s checkbooks and provided checks to co-conspirators to either cash or deposit, making him the sort of high-level participant that relies on runners to take the risks. Defendant also made several initial deposits to fund the fraudulent accounts and numerous calls were made from his cell phone to the banks used in the scheme, from which the district court inferred that he was keeping tabs on the various accounts. There also was ample evidence that defendant controlled other participants. At sentencing, an FBI agent testified that defendant supervised one of the runner’s trips to cash a fraudulent check by following in another car; after a co-conspirator had collected the money from the runner, the co-conspirator gave it to defendant. Based on the FBI agent’s testimony, the court found that there was “compelling evidence” that defendant was an organizer or leader. U.S. v. Olejiya, __ F.3d __ (D.C. Cir. June 10, 2014) No. 12-3082.
D.C. Circuit approves role enhancement for “mastermind” of offense. (431) While working as an accountant for a credit union, defendant stole thousands of dollars from his employer by manipulating its accounting system. He was convicted of bank and wire fraud. Defendant challenged a § 3B1.1(c) enhancement, arguing for the first time on appeal that the district court failed to make the necessary finding that he exercised control over another criminal participant. The D.C. Circuit upheld the enhancement, noting that the court relied on the PSR’s unchallenged finding that defendant “was the mastermind of his offense,” as well as its own finding that defendant’s cousin, who received money that defendant unlawfully wired to the cousin’s account, was “involved in th[e] whole event.” The word “mastermind” has real meaning; masterminds direct and control others. Although the “others” might be innocent and unwitting participants, it was evident from the court’s discussion of defendant’s cousin’s criminal involvement that the court found that defendant controlled at least one criminal participant. U.S. v. Clark, 747 F.3d 890 (D.C. Cir. 2014).
D.C. Circuit upholds leadership role in immigration fraud but rejects role in bank fraud. (431) Defendant was convicted of bank fraud and immigration fraud in connection with a scheme in which he filed hundreds of applications for labor certification containing false representations that various shell companies would employ his alien clients. He reproduced counterfeit checks to draw on his clients’ bank accounts. The D.C. Circuit held that the district court did not clearly err in applying a leadership enhancement to defendant’s immigration fraud conviction; however, the court did clearly err in finding that defendant was a leader of the bank fraud scheme. With regard to the immigration fraud, a government investigator testified that employees of the American Immigration Agency (AIA) completed applications knowing that the sponsoring companies were fictitious and signed the names of AIA clients knowing that the signatures were not authorized. However, none of the evidence indicated that any employee actually assisted defendant in the bank fraud. U.S. v. Bisong, 645 F.3d 384 (D.C. Cir. 2011).
D.C. Circuit holds that lieutenants in street gang held supervisorial roles. (431) Defendants were member of the M Street Crew, which operated a massive drug ring in Washington, D.C. The D.C. Circuit upheld enhancements for having played a management or supervisory role with respect to the gang’s distribution of PCP, ecstasy, and crack cocaine. Testimony indicated defendant Wilson exercised decision-making authority, and that he was a lieutenant, rather than a foot soldier. When the conspiracy leader was absent, the street sellers would go to the lieutenants when they needed advice. The lieutenants also resolved altercations among the food soldiers in the leader’s absence. The district court made similar findings regarding defendant’s Blackson’s role in the conspiracy. Blackson told an undercover agent that “he and his brother supply everyone on M Street,” and that investigating officers initially thought Blackson was the Crew leader based on his conduct and position. Cooperating witnesses also identified Blackson as a lieutenant. U.S. v. Wilson, 605 F.3d 985 (D.C. Cir. 2010).
D.C. Circuit upholds leadership increase for defendant who recruited mules to carry heroin into U.S. (431) Defendant pled guilty to conspiracy to import heroin into the U.S. between 1994 and 1998. In conversations with a jailhouse informant, defendant said that he had been paid $2,000 for recruiting Cruz to act as a mule to import heroin into the U.S. The court found that defendant had introduced Cruz to a drug importer named Valles, that Valles had provided Cruz with heroin, and that Cruz had ingested the heroin before boarding a plane bound for New York, where defendant met him and unsuccessfully tried to assist him in passing the heroin. The D.C. Circuit affirmed a § 3B1.1(c) leadership increase. The panel also rejected defendant’s argument that Valles and Cruz were part of a different conspiracy than the one to which defendant pled guilty. Defendant pled guilty to conspiring to import heroin into New York from Nepal and Thailand, and conspiring to possess it with intent to distribute between 1994 and August 1998. Cruz died on May 5, 1997, after ingesting heroin while smuggling it from Nepal to New York. Defendant tried unsuccessfully to get him to pass the heroin in New York. It was not plainly erroneous for the court to infer that Cruz died “muling” heroin as part of the same drug conspiracy to which defendant pled guilty. U.S. v. Shah, 453 F.3d 520 (D.C. Cir. 2006).
D.C. Circuit holds that alien smuggling operation had at least five participants. (431) Defendant was a crew member of a boat that attempted to smuggle more than 200 aliens into the United States. He received a four-level increase for being an organizer or leader of a criminal activity that involved five or more participants. The D.C. Circuit agreed that the smuggling scheme involved at least five participants. Co-conspirator Li testified at his own sentencing hearing that three men supervised Li in his capacity as an enforcer. Li also stated some of the most culpable persons were not even indicted in the case. The government proved that defendant was an organizer or leader of the smuggling activity. First, at his plea hearing, defendant did not contest the government’s assertion that were it not for him, “the boat and the people would not have made it to America.” Second, at sentencing, defendant’s counsel conceded that defendant was in charge of maintaining the operation of the boat. Third, co-conspirator Wang testified that defendant was “in charge” of the boat, and that defendant was the one to receive phone calls from Taiwan giving instructions about the scheme. Fourth, defendant was the one who initially denied the Coast Guard’s request to board the smuggling boat. Also, one Coast Guard officer testified that defendant “was the one all the other enforcers … looked to before they made any move at all.” U.S. v. Yeh, 278 F.3d 9 (D.C. Cir. 2002).
D.C. Circuit says Apprendi applies to leadership increase. (431) Defendant argued that the four-level increase that he received for his leadership role in various offenses was improper under Apprendi v. New Jersey, 530 U.S. 466 (2000). “Because the fact of leadership role may increase a defendant’s sentence beyond the prescribed statutory maximum,” the D.C. Circuit found Apprendi applicable. “Accordingly, the issue of leadership must be charged in an indictment, submitted to a jury, and proved beyond a reasonable doubt.” However, the panel declined to exercise its discretion to correct the plain error, since the record evidence “overwhelmingly demonstrate[d] that defendant managed and masterminded various offenses committed by the L Street Crew.” Defendant enlisted members to assist him in distributing drugs and participated in acts of violence against rival drug groups, and orchestrated the kidnapping, sexual assault and shooting of a woman. There was proof beyond a reasonable doubt that defendant held a leadership role in the criminal activities for which he was convicted. U.S. v. Fields, 242 F.3d 393 (D.C. Cir. 2001), on rehearing en banc, U.S. v. Fields, 251 F.3d 1041 (D.C. Cir. 2001).
D.C. Circuit agrees that defendant held leadership or organizer role in fraud scheme. (431) Defendant fraudulently procured and used credit cards, ATM cards, check cards and checks issued in other people’s names. In some case, he opened entirely new accounts, while in other cases he supplied confidential personal information about actual account holders to fraudulently gain control of their accounts. In finding that defendant was an organizer or leader, the district court relied heavily on the testimony of Terrell, a former bank teller who provided defendant with names and confidential information regarding account holders. The court found that defendant solicited Terrell’s involvement and gave him “very explicit directions as to exactly the kind of information, and exactly the kind of profile that he wanted.” In addition, Terrell received little gain from the entire scheme, and had no decision-making authority. The D.C. Circuit agreed that defendant held a leadership or organizer role. The exercise of decision-making authority, recruitment, and a right to a larger share of the proceeds are prominent among the factors that the commentary to the guidelines says should be considered. See Note 4 to § 3B1.1. Since the court’s findings accurately reflected Terrell’s trial testimony, the court’s determination easily met the “due deference” standard. U.S. v. Wilson, 240 F.3d 39 (D.C. Cir. 2001).
D.C. Circuit holds that defendant was manager or supervisor of drug conspiracy. (431) Defendant was a member of a street gang that engaged in drug-related activity. The D.C. Circuit agreed that defendant was a manager and supervisor within the drug conspiracy. Defendant gave crack to “pipeheads” who would sell it and give him the proceeds, he watched over “pipeheads” while a colleague was away, he oversaw sales for a senior conspirator, he collected money from runners, and was filmed directing drugs transactions by subordinate runners. U.S. v. Graham, 162 F.3d 1180 (D.C. Cir. 1998).
D.C. Circuit holds participant need not be supervised in the offense of conviction. (431) Defendant was the co-owner of a health care agency that provided home nursing care to Medicaid and Medicare patients. At the direction of defendant and a co-defendant, the agency billed Medicaid and Medicare for $106,506 in services it did not perform. Defendant challenged a § 3B1.1(c) enhancement for supervisory role, claiming that none of the nurses who falsified treatment records and time sheets at her instruction were criminally responsible for the crimes of which she was convicted because the nurses were not involved in the billing, and the nurses’ falsified records were not used to bill Medicaid or Medicare. The D.C. Circuit upheld the enhancement because a “participant” need not be involved in the offense of conviction. Defendant’s role in the offense is based on all relevant conduct under § 1B1.3, not just the count of conviction. The district court was free to consider defendant’s role with respect to all crimes, charged or otherwise, that were part of the same course of conduct or common scheme or plan. Here, defendant supervised the creation of a materially false document. It was clearly part of the same course of conduct as the offenses of which defendant was convicted. U.S. v. Bapack, 129 F.3d 1320 (D.C. Cir. 1997).
D.C. Circuit affirms supervisory role for recruiting and serving as link between buyers and supplier. (431) The district court applied a organizer enhancement based on defendant’s service in linking together a drug dealer and his confederates in the drug supply network with the buyer and reseller. The D.C. Circuit affirmed. The district court found that defendant recruited the buyer to buy cocaine from the supplier since defendant was the one who gave the buyer’s phone number to the supplier. This conclusion was reasonable since defendant was the supplier’s cellmate and the buyer’s de facto brother-in-law. Although defendant claimed that the supplier got the buyer’s number from another inmate, he gave no record citation for this claim. U.S. v. Gaviria, 116 F.3d 1498 (D.C. Cir. 1997).
D.C. Circuit affirms drug quantity, firearm increase, and managerial role for lieutenant in violent drug ring. (431) Defendant participated in a large drug conspiracy. The D.C. Circuit affirmed the attribution of all the drugs in the conspiracy to defendant, a § 3B1.1(b) managerial role enhancement, and a § 2D1.1(b) (1) firearms enhancement. Defendant was a lieutenant in the drug ring who supervised street sellers, was close to some of the ring’s leaders, and engaged in violent activities on behalf of the ring. He delivered guns and handled and oversaw drug runners on the streets. He was convicted of carrying a firearm in the area the ring distributed drugs. There was testimony that at the time of his arrest, there was an ongoing situation with a rival gang over control of the territory. U.S. v. Thomas, 114 F.3d 228 (D.C. Cir. 1997).
D.C. Circuit upholds managerial role despite acquittal on charges of employing minors to distribute drugs. (431) Defendant was convicted of a RICO conspiracy and a narcotics conspiracy in connection with his participation in a large drug ring. He objected to a supervisorial enhancement since the jury acquitted him of employing minors to distribute drugs. The D.C. Circuit held that the acquittal did not bar the court from applying the managerial role enhancement. The court was free to determine based on a preponderance of the evidence presented at trial in support of the acquitted count that defendant was a lieutenant or manager of the drug ring. Evidence at trial showed that defendant participated in the conspiracy at a significant level. He was involved in processing, packaging and distributing drugs, he communicated with the leaders of the conspiracy and was aware of their activities. He enjoyed the profits of the drug sales, he sought to protect the ring’s territory, and played a managerial role when his brothers were out of town. U.S. v. Thomas, 114 F.3d 228 (D.C. Cir. 1997).
D.C. Circuit upholds leadership role for manager of car dealership involved in money laundering. (431) Defendant was one of several car salesmen caught in a sting operation in which an undercover officer posed as a drug dealer seeking to buy cars with the cash proceeds of cocaine sales. The D.C. Circuit agreed that defendant, a general manager of one of the car dealerships, held a supervisory role under § 3B1.1(b). Defendant coordinated each transaction after the first, putting the agent in touch with hand‑picked salesmen. Defendant profited from the deals and was viewed by the salesmen as the central figure in the money laundering operation. U.S. v. Spriggs, 102 F.3d 1245 (D.C. Cir. 1996).
D.C. Circuit upholds supervisory role enhancement based on circumstantial evidence. (431) The D.C. Circuit approved a supervisory role enhancement based on “circumstantial evidence galore” that defendant had extensive drug dealings with an undercover agent, made introductions, found sources of heroin for him, conducted negotiations for the supply of heroin to the undercover officer, dealt with other drug dealers and recruited co‑conspirators. U.S. v. Layeni, 90 F.3d 514 (D.C. Cir. 1996).
D.C. Circuit affirms role enhancement for orchestrating large bankruptcy fraud. (431) Defendant argued for the first time on appeal that the district court failed to make adequate factual findings to support a four-level § 3B1.1(a) enhancement. The D.C. Circuit found that because defendant failed to object to the absence of such findings, defendant waived his right to challenge the enhancement on this ground and it was bound to affirm since the enhancement was supported by the record. The government’s evidence of defendant’s elaborate scheme to defraud the bankruptcy court, involving multiple bank accounts, aliases and transactions, supported the implicit finding that defendant orchestrated an “extensive” criminal activity. U.S. v. Sobin, 56 F.3d 1423 (D.C. Cir. 1995).
D.C. Circuit finds defendant was leader or organizer of kickback scheme. (431) Defendant, a public official of a federal agency, conspired to solicit kickbacks from contractors in two projects, then conspired to conceal his activities. The D.C. Circuit held that defendant played an aggravating role as a leader or organizer of the criminal activity. Defendant devised each detail of the bribery schemes, and even coerced the contractors to assist him in carrying out his plan. He sought out both knowing and unwitting accomplices to aid in the scheme. Though some of the money was distributed to the others, almost all was used for defendant’s benefit. U.S. v. Kelley, 36 F.3d 1118 (D.C. Cir. 1994).
D.C. Circuit refuses remand to determine whether conspiracy involved five or more participants. (431) The D.C. Circuit refused to remand for an explicit finding on whether defendants’ adjustments under sections 3B1.1(a) and (b) were based on the extensiveness of the criminal activity or the fact that five or more persons participated. The adjustments could properly have rested on either factor based on the facts adopted by the district court in the presentence reports. The reports specifically described the wide geographic reach of the conspiracy and the extensiveness of the actions taken by at least five persons who were involved in the scheme. U.S. v. Dale, 991 F.2d 819 (D.C. Cir. 1993).
D.C. Circuit upholds managerial enhancement for drug conspirator. (431) The D.C. Circuit affirmed a three level enhancement under guideline section 3B1.1(b) based upon defendant’s managerial role in a drug conspiracy that involved five or more participants. The district court found that defendant supervised a co- defendant as well as unindicted co-conspirators and juveniles, that defendant controlled the cocaine flow to several workers, collected money and was major participant in all the activities of the conspiracy, including the distribution of 100 to 200 kilos of crack in the District of Columbia. He admitted to the probation officer that he paid salesmen as much as $1,000 to $2,000 a week, and that he himself made as much as $5000 a day from the drug trade. U.S. v. Harris, 959 F.2d 246 (D.C. Cir. 1992), abrogated on other grounds by U.S. v. Stewart, 246 F.3d 728 (D.C. Cir. 2001).