Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-30131/USCOURTS-ca9-14-30131-0/pdf.json

Parties Involved:
Delyle Shanny Augare
Appellant
United States of America
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

DELYLE SHANNY AUGARE,

Defendant-Appellant.

No. 14-30131

D.C. No.

4:13-cr-00065-

BMM-2

OPINION

Appeal from the United States District Court

for the District of Montana

Brian M. Morris, District Judge, Presiding

Submitted August 31, 2015*

Seattle, Washington

Filed September 9, 2015

Before: Alfred T. Goodwin, Ronald M. Gould,

and Sandra S. Ikuta, Circuit Judges.

Opinion by Judge Gould

* The panel unanimously concludes this case is suitable for decision

without oral argument. See Fed. R. App. P. 34(a)(2).

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2 UNITED STATES V. AUGARE

SUMMARY**

Criminal Law

The panel affirmed a sentence in a case in which the

district court applied a “sophisticated means” enhancement

under U.S.S.G. § 2B1.1(b)(10)(C) following the defendant’s

guilty plea to conspiracy to defraud the United States, False

Claims Act conspiracy, theft from an Indian tribe receiving

federal funding, and federal income tax evasion.

The panel held that the district court did not abuse its

discretion when it applied the “sophisticated means”

enhancement to the defendant’s offense conduct. The panel

explained that the coordinated and repetitive steps that the

defendant took to transfer money from the Po’Ka project to

his personal bank account are comparable in complexity and

sophistication to the schemes held to warrant the

enhancement in both this court’s precedent and persuasive

authority from other circuits.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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UNITED STATES V. AUGARE 3

COUNSEL

Colin M. Stephens, Smith & Stephens, P.C., Missoula,

Montana, for Defendant-Appellant.

Michael W. Cotter, United States Attorney, and Carl E.

Rostad, Assistant United States Attorney, United States

Attorney’s Office, Great Falls, Montana, for PlaintiffAppellee.

OPINION

GOULD, Circuit Judge:

We consider under what circumstances a “sophisticated

means” sentencing enhancement may be given under

U.S.S.G. § 2B1.1(b)(10)(C).

Delyle Shanny Augare appeals his sentence following his

guilty plea to four counts: (1) conspiracy to defraud the

United States, in violation of 18 U.S.C. § 372; (2) False

Claims Act conspiracy, in violation of 18 U.S.C. § 286;

(3) theft from an Indian tribe receiving federal funding, in

violation of 18 U.S.C. § 666(a)(1)(A); and (4) federal income

tax evasion, in violation of 26 U.S.C. § 7201.

Specifically, Augare challenges the district court’s

application of the “sophisticated means” sentencing

enhancement under U.S.S.G. § 2B1.1(b)(10)(C). We review

a district court’s application of the Sentencing Guidelines to

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4 UNITED STATES V. AUGARE

the facts for abuse of discretion.1 United States v. Jennings,

711 F.3d 1144, 1146 (9th Cir. 2013). For the reasons that

follow, we conclude that the district court did not abuse its

discretion when it applied the “sophisticated means”

enhancement to Augare’s offense conduct.

Augare argues that “[n]either the fraud perpetrated

through [the Po’Ka Project] nor Augare’s conduct involve[d]

sophisticated means,” and asks us to vacate his sentence and

remand for resentencing without the “sophisticated means”

enhancement under § 2B1.1(b)(10)(C). Augare contends that

because Application Note 9(B) to § 2B1.1(b)(10)(C) defines

“sophisticated means” as an “especially complex or

especially intricate offense conduct pertaining to the

execution or concealment of an offense,” the “sophisticated

means” enhancement does not apply to his conduct, which he

asserts consisted of simple lies, “penny ante” fraud involving

improper use of fuel cards, and transferring money, to which

he was not entitled, into and out of a bank account that he

controlled jointly with the Project’s co-director.

Augare asks us to parse the language of the “sophisticated

means” enhancement under § 2B1.1 in the same way we

parsed the “sophisticated means” enhancement for smuggling

under § 2T3.1(b)(1) in United States v. Montano, 250 F.3d

709 (9th Cir. 2001). There, we reversed the district court’s

application of a “sophisticated means” enhancement under

§ 2T3.1(b)(1), because the defendants’ activities were “all

inherent in the activity of smuggling[, which], by its nature,

 

1 We reject Augare’s assertion that our review is de novo here. As the

government contends, the district court “merely [applied] the facts to the

guidelines” when it sentenced Augare. It did not interpret the meaning of

the guidelines.

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UNITED STATES V. AUGARE 5

involves active steps to avoid detection.” Id. at 715. Augare

contends that “[a]ll of this activity was necessary to

perpetrate the scheme, nothing more. Had the money

remained in the [Project’s] fund, no crime would have

occurred.” Augare also contrasts his use of the charity’s bank

account with what he contends are more egregious methods

such as setting up shell corporations or using foreign tax

havens, urging that “[t]he simple and common practice of

moving money from one bank to another is not only

unsophisticated, it is common practice in the modern global

economy.” We disagree with Augare’s characterization of

his offense conduct, and more precisely it was not an abuse

of discretion for the district court to disagree.

Augare’s comparison of his conduct to the offense

conduct in Montano is misplaced. The “sophisticated means”

enhancement that applied there was specific to the offense

conduct of smuggling, not the type of financial fraud involved

here. Also, the defendant in Montano simply used a bank

account to pay others to do his dirty work—i.e., physical

smuggling of Mexican pharmaceuticals into the United

States. See id. at 711. Here, Augare sent money from the

Po’Ka Project to one of his co-defendants for services

allegedly rendered to the Po’Ka Project. That co-defendant

then “donated” half of the money back to a children’s charity

using checks that were shipped to the Po’Ka Project’s offices

and closely guarded by the Project’s directors, including

Augare. Then Augare, who controlled the children’s

charity’s bank account, withdrew the “donated” money and

deposited it into his personal bank account.

Under our precedent on “sophisticated means”

enhancements that apply to financial fraud offense conduct,

Augare’s conduct here supports the district court’s

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6 UNITED STATES V. AUGARE

application of the “sophisticated means” enhancement under

§ 2B1.1(b)(10)(C). See United States v. Tanke, 743 F.3d

1296, 1307 (9th Cir. 2014) (noting that while the defendant

did not use corporate shells or offshore financial accounts as

mentioned in Application Note 9(B), the “sophisticated

means” enhancement under § 2B1.1(b)(10)(C) was justified

because he engaged in “dozens of various acts,” including

falsifying invoices and checks, to conceal payments);

Jennings, 711 F.3d at 1145 (upholding a “sophisticated

means” enhancement for using a bank account with a

deceptive name to conceal income and stating that conduct

need not involve “highly complex schemes or exhibit

exceptional brilliance” to warrant the enhancement); see also

United States v. Horob, 735 F.3d 866, 872 (9th Cir. 2013)

(per curiam) (affirming application of the “sophisticated

means” enhancement under § 2B1.1(b)(10)(C), in part,

because the defendant falsified documents and left a

“complicated and fabricated” paper trail that made it hard to

uncover his fraud).

Applying the “sophisticated means” enhancement under

§ 2B1.1(b)(10)(C) to Augare’s conduct is also consistent with

precedents from other federal circuits. See United States v.

Ghertler, 605 F.3d 1256, 1267–68 (11th Cir. 2010) (holding

that although some of the defendant’s fraudulent activities

were not sophisticated, the “totality of the scheme” qualified

for the “sophisticated means” enhancement, as the defendant

had conducted extensive research to identify his targets, used

unwitting couriers to deliver the proceeds of his fraud, forged

company documents, and had funds transferred to the

accounts of unwitting third parties); see also United States v.

Jackson, 346 F.3d 22, 25 (2d Cir. 2003) (holding that even if

each step in an identity theft scheme is not elaborate, a

“sophisticated means” enhancement is warranted if the steps

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UNITED STATES V. AUGARE 7

in the scheme are “linked together so that [the defendant can]

perceive and exploit different vulnerabilities in different

systems in a coordinated way”); United States v. Finck,

407 F.3d 908, 915 (8th Cir. 2005) (“While [the defendant] did

not use sophisticated means to conceal his criminal activity,

we find that he used sophisticated means to execute his

scheme. Repetitive and coordinated conduct, though no one

step is particularly complicated, can be a sophisticated

scheme.”).

Here, the coordinated and repetitive steps that Augare

took to transfer money from the Po’Ka project to his personal

bank account are comparable in complexity and

sophistication to the schemes held to warrant a “sophisticated

means” enhancement in both our precedent and persuasive

authority from other circuits reviewed above. The district

court did not abuse its discretion by applying the

“sophisticated means” enhancement under § 2B1.1(b)(10)(C)

to Augare’s offense conduct.

AFFIRMED.

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