Sentencing
7207- Fraudulent
Returns, Statements, or Other Documents: Sentencing
[91-1 USTC ¶50,030]
United States of America
, Plaintiff-Appellee v. George A. Garcia, Defendant-Appellant
(CA-5),
U.S. Court of Appeals, 5th Circuit, 89-7074, Summary Calendar,
6/6/90
, Affirming an unreported District Court decision
[Code Secs.
7207 and 7212 ]
Crimes: Obstruction of justice: False tax refund claims:
Sentencing.--The imposition of consecutive sentences on a taxpayer
simultaneously convicted of filing a false tax refund claim and of later
attempting to hamper an investigation of the false claim was upheld
despite the fact that the later crime was subject to sentencing
guidelines which would have required concurrent sentences had both
crimes been subject to the guidelines. The District Court has
discretionary power to impose consecutive sentences, contrary to the
mandate of sentencing guidelines, on a taxpayer simultaneously convicted
of both "guidelines" and "pre-guidelines" offenses.
Consecutive sentences do not violate the sentencing guidelines under
such circumstances. Moreover, the court did not err by requiring the
term on the "guidelines" count to run consecutively to that of
the "pre-guidelines" count since the taxpayer was not
prejudiced by such order.
Before
POLITZ, GARWOOD, and JOLLY, Circuit Judges.
GARWOOD,
Circuit Judge:
Defendant-appellant
George A. Garcia (Garcia) challenges the district court's order that he
serve his sentence on one count of obstruction of justice, which is
subject to the United States Sentencing Guidelines (Guidelines count),
consecutively to his sentence on another count of filing a false claim
for a federal income tax refund, which is not subject to the Sentencing
Guidelines (pre-Guidelines count). We affirm.
Facts
and Proceedings Below
According
to the factual resume supporting his guilty plea, Garcia prepared and
filed in the name of Trinidad M. Hernandez (Hernandez) a false claim for
a federal income tax refund on or about
February 28, 1986
. In response, the United States Treasury Department mailed a check
payable to Hernandez for $4,800 to the address of Garcia's brother, who
apparently forwarded it to Garcia. Garcia apparently forged Hernandez'
signature and deposited the check in his, Garcia's, personal account. On
November 1, 1988
, federal agents questioned Garcia concerning this tax refund claim made
in Hernandez' name. Immediately following this questioning, Garcia
proceeded to Hernandez' residence and offered Hernandez an acre of land
if Hernandez would cover up the false tax refund claim. Garcia requested
Hernandez not to answer any questions about the claim or refund check
and, if he felt he had to answer such questions, that Hernandez falsely
state that he had authorized Garcia to file the claim. 1
Pursuant
to a plea agreement, Garcia entered a plea of guilty to two counts of a
six-count indictment--namely, one count of filing a false claim for a
federal income tax refund on or about
February 28, 1986
, in violation of 18 U.S.C. §287, relating to the false Hernandez
refund claim, and another count of obstruction of justice on or about
November 1, 1988
, in violation of 18 U.S.C. §1510, relating to the offer to pay
Hernandez for his silence or false statements regarding the
investigation of the refund claim. Prior to accepting Garcia's guilty
plea, the district court pointed out to him that the Sentencing
Guidelines did not apply to the false tax refund claim count.
On
November 17, 1989, the district court sentenced Garcia to the statutory
maximum of five years' imprisonment on the pre-Guidelines count, the
February 28, 1986 false tax refund claim count, in light of his prior
convictions for similar violations. See note 1, supra; 18 U.S.C.
§287. With respect to the Guidelines count, the November 1, 1988
obstruction of justice count involving the offer to Hernandez, the
amended presentence report recommended a guideline sentencing range of
fifteen to twenty-one months' imprisonment, 2 based on a
criminal history of four and an adjusted offense level of ten. 3 Adopting
that recommendation, the district court sentenced Garcia to twenty-one
months' imprisonment on the Guidelines count, to be served consecutively
to the sentence on the pre-Guidelines count and to be followed by three
years of supervised release. This appeal followed.
Discussion
Garcia's
sole contention on appeal is that the court erred in ordering his
imprisonment sentence on the two counts to be served consecutively. His
principal argument is that the confinement terms on each count should
have been concurrent, but he also asserts that in any event his
confinement sentence on the Guidelines count should not have been made
consecutive to that on the pre-Guidelines count. Garcia does not contend
that the court erred in imposing a five-year term of imprisonment on the
pre-Guidelines count or a twenty-one-month term of imprisonment on the
Guidelines count.
This
case might involve an easier issue to resolve if both counts were
governed by the Sentencing Reform Act of 1984, 18 U.S.C. §3551 et
seq., and the Sentencing Guidelines promulgated pursuant to that
Act. Section 3584(a) provides that "[m]ultiple terms of
imprisonment imposed at the same time run concurrently unless the court
orders or the statute mandates that the terms are to run
consecutively." Section 3584(b) qualifies the previous subsection:
"The court in determining whether the terms imposed are to be
ordered to run concurrently or consecutively, shall consider, as to each
offense for which a term of imprisonment is being imposed, the factors
set forth in section 3553(a)," which incorporates the Sentencing
Guidelines.
Section
5G1.2 of the Sentencing Guidelines outlines the approach for sentencing
on multiple counts of conviction. First, the adjusted offense level of
each count is determined and added together. The combined adjusted
offense level then is compared with the applicable criminal history
category in order to determine the "total punishment."
U.S.S.G. §5G1.2(b); see id. comment. If the statutory maximum of
at least one of the counts is adequate to permit imposition of the total
appropriate guideline punishment as the sentence on that count, then
"[t]he
sentence on each of the other counts will then be set at the lesser of
the total punishment and the applicable statutory maximum, and be
made to run concurrently with all or part of the longest sentence.
If no count carries an adequate statutory maximum, consecutive sentences
are to be imposed to the extent necessary to achieve the total
punishment."
Id.
comment. (Emphasis added). 4
Whether
the district court erred in imposing consecutive sentences in the
present case is complicated by the fact that the Sentencing Guidelines
do not apply to the false tax refund claim count because the offense
underlying that count occurred on
February 28, 1986
, well prior to the
November 1, 1987
effective date of the Sentencing Guidelines. See, e.g.,
United States
v. King, 895 F.2d 205, 205 (5th Cir. 1990) (per curiam). The Fourth
Circuit recently addressed such an issue in United States v. Watford,
894 F.2d 665 (4th Cir. 1990) (opinion by Judge Wilkins, the Chairman of
the United States Sentencing Commission).
In
Watford
, the court upheld the district court's order that various
defendants serve their respective sentences for conspiracy to commit
mail fraud, which was governed by the Sentencing Guidelines,
consecutively to their respective sentences on a number of
pre-Guidelines substantive counts. See id. at 667 ("As to
the [Guidelines] conspiracy count, the district judge sentenced Watford
under the sentencing guidelines to a five-year term of imprisonment to
be served consecutively to the thirty-five year term imposed for
the" pre-Guidelines counts; emphasis added). The Fourth Circuit
reasoned:
"In
any event, since the conspiracy count was the only count subject to the
sentencing guidelines and the dictates of the Sentencing Reform Act,
that is as far as the guidelines can reach in their requirements. As we
have recognized, the sentencing court has unfettered discretion to
impose sentences on pre-guidelines counts consecutively or concurrently.
And nothing in the guidelines or the Sentencing Reform Act precludes the
court from ordering that a sentence imposed on a pre-guidelines count be
served consecutively to a sentence imposed on a guidelines count.
"Granted
it would have been more in keeping with the intent of the Act and the
sentencing guidelines to . . . impose a sentence on the conspiracy count
consecutively only to the extent necessary to provide an incremental
increase in punishment for that portion of the total criminal activity
not included and punished in the sentence on the substantive counts.
But, we cannot say that the court's use of its concurrent/consecutive
authority to fashion what it considered an appropriate sentence, taking
into account the difference between pre-guideline sentences for which
parole is available and guideline sentences for which it was not,
was erroneous. . . . Consequently, the decision of the district court
may not be disturbed."
Id.
at 669-70 (emphasis added).
See
also United States v. Helms, 897 F.2d 1293, 1299 (5th Cir.1990)
(upholding defendants' consecutive sentences on multiple pre-Guideline
counts of mail fraud and emphasizing that "[t]he district court has
broad discretion in sentencing determinations"). 5
We
agree with Judge Wilkins' opinion in Watford that sentencing
courts have the discretionary power to impose consecutive sentences
contrary to the mandate of the Sentencing Guidelines where a defendant
is convicted for both Guidelines and pre-Guidelines offenses. In light
of our concurrence with Watford and Garcia's concession that the
district court properly imposed a twenty-one-month term of imprisonment
on the Guidelines count, we reject Garcia's contention that the
imposition of consecutive sentences constituted a departure from the
Sentencing Guidelines. 6
Even
if section 5G1.2 of the Sentencing Guidelines does not apply to the
pre-Guidelines count, Garcia asserts that this section still is
applicable to the Guidelines count. Thus, Garcia contends that the court
erred in ordering the term of imprisonment on the Guidelines count to
run consecutively to that on the pre-Guidelines count. However, Watford
upheld such a sentence. Moreover, Garcia does not suggest that he is
prejudiced in any manner by the sentence on the Guidelines count running
consecutively to that on the pre-Guidelines count, as opposed to
the sentence on the pre-Guidelines count running consecutively to that
on the Guidelines count. 7 Nor does he
ask that we change the order in which his sentences are to be served so
that the Guidelines sentence is served first or that we direct the
district court to do so. We, therefore, conclude that Garcia's
contention in this latter respect does not entitle him to any relief on
appeal.
For
the foregoing reasons, Garcia's sentence is
AFFIRMED.
1
On
February 20, 1986
, in another proceeding, a district court had sentenced Garcia on three
counts of filing false tax refund claims. The court ordered Garcia to
serve consecutive sentences of four years' imprisonment on two of those
counts. The court allowed Garcia to surrender voluntarily to federal
prison authorities on
March 3, 1986
. Garcia filed the false claim at issue in the present case shortly
before surrendering to prison authorities because of the prior
violations. Garcia was paroled from the Salvation Army Halfway House on
October 21, 1988
. Soon thereafter, Garcia attempted to bribe Hernandez to cover up the
instant false tax refund claim. As a result, the United States Parole
Commission issued a parole violator's warrant and filed it as a
detainer. See Tijerna v. Thornburgh, 884 F.2d 861, 864-66 (5th
Cir. 1989).
2
The district court found as to the obstruction of justice count that
there were no aggravating or mitigating factors warranting a departure
from the applicable sentencing range under the Sentencing Guidelines.
The statutory maximum term of imprisonment for obstruction of justice is
five years. See 18 U.S.C. §1510(a).
3
The base offense level for obstruction of justice is twelve. See U.S.
Sentencing Comm'n, Guidelines Manual §2J1.2 (Nov. 1989)
(hereinafter U.S.S.G.). The district court determined that the offense
level should be adjusted downward by two levels because of Garcia's
acceptance of responsibility. See id. §3E1.1(a).
4
The commentary to section 5G1.2 was amended for purposes of clarification
on
November 1, 1989
--shortly before the district court sentenced Garcia--by deleting the
phrase, "any combination of concurrent and consecutive sentences
that produces the total punishment may be imposed," and inserting
in lieu thereof the phrase, "consecutive sentences are to be
imposed to the extent necessary to achieve the total punishment."
See id. App. C, No. 287, at C.149. This clarifying change is of
no relevance to the present issues.
As
noted earlier, the district court determined that the adjusted offense
level applicable to the Guidelines count is ten. The district court did
not apply the Sentencing Guidelines to the pre-Guidelines count. It is
unclear, therefore, exactly what its adjusted offense level would be if
it were under the Sentencing Guidelines. The base offense level for such
a fraud-related offense is six. See id. §2F1.1(a). Because the
loss related to that count apparently was $4,800, the offense level
would be increased by one level. See id. §2F1.1(b)(1)(B).
Because Garcia apparently accepted responsibility for his criminal
conduct, the offense level would also be decreased by two levels. See id.
§3E1.1(a). If it were determined, for example, that the offense
involved more than minimal planning and violated a judicial order, the
offense level would be increased by a total of four levels. See id.
§§2F1.1(b)(2)(A), 2F1.1(b)(3)(B).
Assuming
that all of these provisions were applicable to the false tax refund
claim count, the adjusted offense level for that count would be nine.
The combined adjusted offense level for both counts would be nineteen
and with the criminal history category of four this would yield a total
sentencing range of forty-six to fifty-seven months. See U.S.S.G.
Chapter 5, Part A at 5.2 (sentencing table). As noted earlier, both
counts have a statutory maximum of five years' imprisonment, which is
adequate to permit imposition of the total punishment. Thus, assuming
that the Sentencing Guidelines were applicable to both counts and that
the adjusted offense level of the false tax refund claim count were
nine, section 5G1.2(c) indicates that the imposition of concurrent
sentences would be warranted in the present case.
5
The United States Sentencing Commission also recently addressed how a
defendant should be sentenced if an indictment includes pre-Guideline
and Guideline counts:
"The
Sentencing Reform Act of 1987, passed on
December 7, 1987
, (Public Law 100-182), included a provision that the guidelines apply
to offenses occurring on or after
November 1, 1987
. The pre-guideline counts would therefore be sentenced under
pre-guideline provisions and counts that pertain to offenses occurring
on or after
November 1, 1987
, would be sentenced under the guidelines.
"Relevant
conduct for offenses subject to the guidelines is to be determined
without regard to the November 1 implementation date. If the relevant
conduct for an offense committed on or after
November 1, 1987
, overlaps with conduct sanctioned as part of a pre-November 1 count,
there would be a potential for double counting unless the pre-guideline
counts were sentenced concurrently. The court will have to carefully
fashion the sentence with these concerns in mind." U.S. Sentencing
Comm'n, Questions Most Frequently Asked About the Sentencing
Guidelines 4 (3d ed. March 1990).
6
If there were such a departure, it could only be justified if the
district court expressly found special circumstances, not adequately
taken into account in the Sentencing Guidelines, warranting the
departure. Since the district court did not consider that it was
departing from the Sentencing Guidelines in this respect, it did not
make any such express findings.
7
For example, Garcia does not allege, and it is not readily apparent from
the applicable federal regulations, that the order of the consecutive
sentences materially affects Garcia's eligibility for parole as to the
pre-Guidelines count. The parole regulations indicate that, where
consecutive sentences are imposed on counts subject to parole, the terms
of imprisonment generally are aggregated in determining when the
defendant may be paroled. See 28 C.F.R. §2.5 (1989); see also 18 U.S.C.
§4205(a) ("Whenever confined and serving a definite term or terms
of more than one year, a prisoner shall be eligible for release on
parole after serving one-third of such term or terms . . . except to
the extent otherwise provided by law." (Emphasis added.)); id.
§4161 (mandating
aggregation of consecutive sentences for determining good time
allowances). The regulations, however, do not expressly address the
situation in which consecutive sentences are imposed as to a count
subject to parole and a count not subject to parole.
The
only relief Garcia has requested is a reversal with directions that the
sentence on the Guidelines count be made to run concurrently with the
sentence on the pre-Guidelines count. Even if Garcia were prejudiced by
the order in which the district court directed the sentences be served,
remand for a new sentencing hearing would not be warranted. At best, we
would order that Garcia's sentence be modified so that his sentence on
the pre-Guidelines count would run consecutively to that on the
Guidelines count (relief that Garcia has not requested). But, as noted,
there is no suggestion that it makes any difference.
[97-2
USTC ¶50,909] United States of America, Plaintiff-Appellee v. Ronald
Fleming, Defendant-Appellant
(CA-6),
U.S. Court of Appeals, 6th Circuit, 96-5762,
10/17/97
, Affirming an unreported District Court decision
[Code
Sec. 7207 ]
Crimes: Fraudulent returns: Sentencing guidelines: Enhancement.--An
individual's sentence following his conviction on tax fraud charges was
correctly enhanced by the trial court, which took into consideration the
total amount of the fraudulent tax refunds that he sought to recover
pursuant to a scheme involving the preparation of fraudulent returns for
gullible third parties. Although he received only a small portion of the
spurious refunds before the IRS discovered his scheme, he intended for
the government to send him all of the refunds claimed. The individual
was not entitled to receive a sentencing windfall merely because some of
the third parties might have been eligible to claim legitimate tax
refunds. Finally, the burden of proof was not improperly shifted to the
individual at his sentencing hearing. The trial court's statement that
he had the "burden of showing the right to a refund" was
simply a shorthand way of stating that the third parties should have
filed returns if they were entitled to refunds.
Tracy
L. Berry, Memphis, Tenn. 38103, for plaintiff-appellee. Michael J.
Stengel, 50 N. Front St., Memphis, Tenn. 38103-1110, for
defendant-appellant.
Before:
MERRITT, JONES, and NORRIS, Circuit Judges.
OPINION
MERRITT,
Circuit Judge:
This
is a sentencing appeal. Defendant Ronald Fleming appeals the district
court's use of "intended loss" to enhance his sentence on
twenty-five counts of tax fraud for preparing fraudulent tax returns in
violation of 18 U.S.C. §287. At issue is whether the district court
correctly enhanced Mr. Fleming's sentence by using the total amount of
fraudulent tax refunds that he filed, without considering whether any of
the taxpayers involved might have been entitled to a legitimate refund.
We find the district court did not abuse its discretion under the
Sentencing Guidelines and thus affirm Mr. Fleming's sentence.
I.
A
jury convicted Mr. Fleming of tax fraud, under 18 U.S.C. §287, for
preparing fraudulent tax returns. He had designed a scheme in which he
convinced low-income residents of particular neighborhoods to allow him
to file fraudulent tax returns on their behalf. After he had obtained a
taxpayer's name, social security number, and address, he created a false
W-2 form, listed a fictional employer, and then electronically filed for
a refund. These refunds were typically based upon head-of-household
status, a fictional dependent who was less than one year old, and earned
income credit. Mr. Fleming then obtained anticipation loans for the
taxpayer in the amount of the refund claimed, from which he took a
percentage. Although he prepared at least fifty-seven of these returns
in 1991, the United States Treasury paid only $2,115 in refunds before
the Internal Revenue Service discovered his scheme.
At
trial, the Government produced the twenty-five fraudulent tax returns
that formed the basis for the indictment. Twenty-three of the
twenty-five taxpayers testified against Mr. Fleming, only four of whom
were employed during 1991. There is no evidence in the record indicating
whether or not one of the taxpayers who did not testify was employed.
The jury convicted Mr. Fleming on all twenty-five counts.
At
the sentencing hearing, the Government sought to establish a greater
loss and thereby enhance Mr. Fleming's sentence by introducing
thirty-two additional returns that he allegedly prepared. These returns
were admissible as relevant conduct under U.S.S.G. §1B1.3. Armed with
these additional returns, the Government requested an increase of seven
levels, pursuant to U.S.S.G. §2F1.1(b)(H), based upon a total loss of
$163,451: $72,182, from the twenty-five returns supporting the
conviction, plus $91,269 in refunds from the additional returns. The
Government produced one witness, a special IRS agent, to authenticate
these additional returns.
Mr.
Fleming objected to the proposed total loss on two grounds. First, he
claimed that the Government could only substantiate $56,940 of the
$72,182 loss, because four of the twenty-five taxpayers had earned
legitimate income in 1991 and one who did not testify might have.
Second, he challenged the Government's proof with respect to the entire
$91,269 from the thirty-two additional returns, since the Government had
not established employment or income status for any of these taxpayers.
Because a total of thirty-seven taxpayers could have been legitimately
entitled to a portion of the requested refunds, Mr. Fleming argued the
Government failed to satisfy its burden of proving any loss over
$56,940. With a substantiated loss of $56,940, he claimed the Government
could only enhance his sentence by five levels, pursuant to U.S.S.G. §2F1.1(b)(F),
resulting in a sentence between forty-one and fifty-one months.
The
district court rejected Mr. Fleming's argument and found the entire loss
of $163,451 was supported by the twenty-five returns produced at trial
and the additional thirty-two claims adduced at sentencing. The court
therefore enhanced Mr. Fleming's sentence by seven levels, pursuant to
U.S.S.G. §2F1.1(b)(h), resulting in a total offense level of seventeen.
When combined with Mr. Fleming's category-VI criminal history, this
resulted in a recommended sentence of fifty-one to sixty-three months.
The district court sentenced Mr. Fleming to sixty months incarceration.
In
this appeal, Mr. Fleming challenges his sentence in two respects. First,
he reiterates his objections to the total intended loss used to enhance
his sentence. Second, he contends the district court improperly shifted
the burden of proof at the sentencing hearing by stating that "the
taxpayer has the burden of showing the right to a refund." We
address these two contentions in turn.
II.
This
Court reviews the district court's calculation of loss under the
sentencing guidelines de novo. United States v. Lucas, 99 F.3d
1290, 1293 (6th Cir. 1996); United States v. Wolfe, 71 F.3d 611,
616 (6th Cir. 1995). The sentencing court's factual findings must be
established by a preponderance of the evidence and are upheld unless
they are clearly erroneous. United States v. Flowers, 55 F.3d
218, 220 (6th Cir. 1995); United States v. Watkins, 994 F.2d
1192, 1195 (6th Cir. 1993). A criminal defendant who appeals the
district court's sentence enhancement based upon the amount of loss
caused by fraud must show that the court's calculation of loss "was
not only inaccurate, but was outside the universe of acceptable
computations." United States v. Jackson, 25 F.3d 327, 330
(6th Cir. 1994); see also U.S.S.G. §2F1.1, comment. n.8
("[T]he loss need not be determined with precision; [t]he court
need only make a reasonable estimate of the loss given the available
information."); United States v. Parrish, 84 F.3d 816, 819
(6th Cir. 1996); United States v. Moored, 38 F.3d 1419, 1424 (6th
Cir. 1994). Mr. Fleming therefore carries a heavy burden on appeal.
The
guidelines provide for sentencing of those convicted of tax fraud under
§2F1.1's specifications. The base offense level for this guideline is
six, while §2F1.1(b) requires increasing offense levels according to
the amount of loss caused by the fraud. The commentary directs the
sentencing court to calculate the "intended loss that the defendant
was attempting to inflict . . . if it is greater than the actual
loss." U.S.S.G. §2F1.1, comment. n.7. Moreover, when the defendant
is convicted under a multiple-count indictment, as here, "[t]he
cumulative loss produced by a common scheme or course of conduct should
be used in determining the offense level, regardless of the number of
counts of conviction." Id. at n.6. The defendant's relevant
conduct, as defined by U.S.S.G. §1B1.3(a)(1)(A), is typically used to
calculate the intended loss from a common scheme or course of conduct. See
United States v. Rayborn, 957 F.2d 841, 844 (11th Cir. 1992). These
requirements reflect §2F1.1's intent to punish fraud convicts according
to the "potential harmfulness and dangerousness of the offender,
independent of the actual harm." U.S.S.G. §2F1.1, at backg'd; United
States v. Khan, 969 F.2d 218, 220 (6th Cir. 1992).
Before
the district court may enhance a defendant's sentence based upon
intended loss, there must be evidence sufficient to show that (1) the
defendant intended the loss, (2) the defendant had the ability to
inflict the loss, and (3) the defendant completed all acts necessary to
cause the loss. Watkins, 994 F.2d at 1196. All three of these
requirements were met in the present case, as evinced by the initial
success of Mr. Fleming's scheme. The United States Treasury paid $2,115
on the fraudulent returns. Presumably it would have paid all of the
refunds had the IRS not discovered his plan. These facts alone reveal
Mr. Fleming possessed the intent, had the ability, and performed the
deeds needed to justify his increased sentence.
The
only other factor to consider is whether a preponderance of the evidence
supports the intended loss the district court used to increase the
sentence. Our precedent defines intended loss as "the loss the
defendant subjectively intended to inflict on the victim, e.g.
the amount the defendant intended not to repay." Moored, 38
F.3d at 1427. In tax fraud cases, we consider the United States Treasury
the victim. United States v. Wright, 12 F.3d 70, 74 (6th Cir.
1993). As long as the record supports, by a preponderance of the
evidence, a conclusion that the defendant realistically intended the
loss at issue, we will affirm the enhanced sentence. Moored, 38
F.3d at 1427-28.
In
the past, we have affirmed the use of total intended loss to enhance a
sentence under §2F1.1 where the defendant designed a scheme to cause a
greater loss than that actually suffered. See United States v.
Sanders, 95 F.3d 449, 454-55 (6th Cir. 1996); Parrish, 84
F.3d at 819. We have vacated sentences only in cases in which the total
intended loss bore no relation to "economic reality," either
because the defendant had paid back a portion of fraudulently acquired
loans, the defendant had only withdrawn a portion of kited checks, or
the plan had no chance of success. See Lucas, 99 F.3d at 1296
(loan repayment); Wright, 60 F.3d at 241 (same); United States
v. Buckner, 9 F.3d 452, 454 (6th Cir. 1993) (same); Watkins,
994 F.2d at 1195-96 (check kiting); Khan, 969 F.2d at 221 (scheme
failed on other grounds) (quoting United States v. Schneider, 930
F.2d 555, 559 (7th Cir. 1991)). Although there are no decisions from
this Circuit directly on point, the only decisions from other circuits
vacating the sentences of defendants convicted under 18 U.S.C. §287
involved some claims that were properly payable. See United States v.
Parsons, 109 F.3d 1002, 1005 (4th Cir. 1997) (partially fraudulent
travel vouchers); United States v. Abud-Sanchez, 973 F.2d 835,
839 (10th Cir. 1992) (mixed bona fide and false Medicare claims). There
is no precedent for reducing a sentence when a defendant like Mr.
Fleming based all of the fraudulent claims at issue on false or
fictional records.
Mr.
Fleming contends the Tenth Circuit's recent decision in United States
v. Rice, 52 F.3d 843 (10th Cir. 1995), supports his position. The
defendant in Rice was convicted for evading personal income tax
through a number of fictional Subchapter S corporations. Although the
district court enhanced his sentence based on the total loss proposed by
the government, the Tenth Circuit vacated this sentence because no
evidence was introduced concerning the amount of taxes the defendant
could have avoided using legal, personal deductions. Id. at 848.
By contrast, Mr. Fleming had no proper claim to any portion of the
refunds at issue here. Any portion of the total loss that these
taxpayers were legally entitled to claim is irrelevant to Mr. Fleming's
sentence, since his scheme did not involve any legitimate claims. The
reasoning of Rice might apply if Mr. Fleming had used the actual
W-2s and real employers of those taxpayers who worked during 1991.
Because he instead fabricated W-2s, dependents, and employers on all the
returns he prepared, Mr. Fleming's reliance upon Rice is
misplaced.
Whether
the total loss used to enhance Mr. Fleming's sentence was outside the
realm of possible computation depends upon what relation $163,451 bears
to the economic loss the IRS stood to lose from Mr. Fleming's scheme.
When this court reviews a sentencing court's calculation of amount of
loss, our touchstone is the "scope of the fraud as designed by
the defrauder." Lucas, 99 F.3d at 1300. In the present
case, Mr. Fleming prepared at least fifty-seven fraudulent tax returns
in the hopes of obtaining a refund for every one he filed. Thus, he
designed his scheme to defraud the United States Treasury out of
$163,451 worth of false refunds, none of which he intended to repay.
There is no evidence that he attempted to obtain legitimate refunds on
behalf of those who worked in 1991. Any refunds that the employed
taxpayers may have been due are therefore separate and distinct from the
fraudulent returns he filed on their behalf. It was simply fortuitous
that some of those whom Mr. Fleming preyed upon were employed in 1991.
Their actual income and employment status did not influence his choice
when he recruited them; he cannot use those facts now to narrow the
scope of the fraud he designed.
Viewing
Mr. Fleming's claims in this light establishes the proper context for
considering Mr. Fleming's second argument. The sentencing court's
statement that "the taxpayer has the burden of showing the right to
a refund" did not shift the burden of proof. Rather, the statement
was simply a shorthand way of stating that those taxpayers should have
filed returns if they were entitled to a refund. Since none of the
employed taxpayers filed legitimate returns in 1991 based upon their
actual W-2s or employers, the district court obviously considered Mr.
Fleming's objection frivolous and self-serving. The district court
recognized that one who prepared fraudulent tax returns using bogus
W-2s, dependents, and employers cannot get a sentencing windfall because
some of the taxpayers involved might have received a refund if they had
filed their own returns. We concur.
III.
Mr.
Fleming was convicted for transforming his legitimate accounting job
into an intricate plan involving gullible citizens, false records, and
fictional employers. He intended the United States Treasury to pay all
of the fraudulent tax returns he prepared. That was his design. The IRS
discovered his scheme before the intended loss became actual. He now
requests a reduction in his sentence as a result of the lawful
employment and legitimate income of those he duped. Yet those working
taxpayers, not Mr. Fleming, deserve the benefit of any legally earned
tax refund. We therefore find Mr. Fleming intended to inflict the total
loss at issue and affirm the district court's calculation of his
sentence.