Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-05-03799/USCOURTS-ca8-05-03799-0/pdf.json

Parties Involved:
Allen Steven Mickle
Appellant
United States of America
Appellee

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

No. 05-3799

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United States of America, *

*

Appellee, *

*

v. *

*

Allen Steven Mickle, also known as *

Allen Stevenson Mickle, *

*

Appellant. *

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Appeals from the United States

No. 05-4344 District Court for the

___________ District of Minnesota.

United States of America, *

*

Appellee, *

*

v. *

*

Sylvester Mickle, also known as “Star”, *

*

Appellant. *

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Submitted: June 13, 2006

Filed: October 3, 2006

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Appellate Case: 05-3799 Page: 1 Date Filed: 10/03/2006 Entry ID: 2095681
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The Honorable Ann D. Montgomery, United States District Judge for the

District of Minnesota.

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Before MURPHY, MELLOY, and COLLOTON, Circuit Judges.

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COLLOTON, Circuit Judge.

Twin brothers Allen and Sylvester Mickle pled guilty to conspiring to defraud

the United States with respect to false claims, in violation of 18 U.S.C. § 286, and four

counts of aiding and abetting false claims against the United States, in violation of 18

U.S.C. §§ 2 and 287. The charges arose from a scheme in which the two brothers

recruited persons to file fraudulent federal and state income tax returns. The

participants filed tax returns using their own names and social security numbers,

claiming refunds based on false W-2 forms that identified legitimate employers with

accurate corresponding employer identification numbers. Allen and Sylvester also

directed the participants to engage tax preparers, such as H&R Block and Jackson

Hewitt, to prepare and file their federal and state tax returns using the fraudulent W-2

forms, and to apply to the tax preparers for “refund anticipation loans” – cash

advances secured by anticipated tax refunds, which were obtained through the tax

preparers and affiliated financial institutions.

The government presented evidence that each participant who filed a fraudulent

tax return received $1500 plus the entire refund from the filed Minnesota tax return.

There was additional evidence that a participant in the scheme received a $500 bonus

whenever a return was filed by another person whom the participant had recruited.

Evidence from some participants indicated that the Mickle brothers received the

remaining proceeds derived from the federal refunds and refund anticipation loans. 

The district court1

 sentenced Allen and Sylvester to 70 and 41 months’

imprisonment, respectively. The Mickles appeal their sentences, and we affirm.

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I.

Allen and Sylvester first contend that the district court erred by applying an

upward adjustment to each of their base offense levels for their roles as organizers and

leaders of the conspiracy. The advisory sentencing guidelines applicable in this case

provide for an upward adjustment of four levels if the defendant was an organizer or

leader of a criminal activity that involved five or more participants. USSG § 3B1.1(a)

(2002). Factors the court should consider in determining whether a defendant was an

“organizer” or “leader” include the defendant’s exercise of decision making authority,

the nature of the defendant’s participation in the commission of the offense, the

recruitment of accomplices, the claimed right to a larger share of the fruits of the

crime, the degree to which the defendant participated in planning or organizing the

offense, the nature and scope of the illegal activity, and the degree of control and

authority the defendant exercised over others. Id. § 3B1.1, comment. (n.4); United

States v. Brockman, 183 F.3d 891, 899 (8th Cir. 1999). More than one participant in

a particular criminal activity can qualify as an organizer or leader. USSG § 3B1.1,

comment. (n.4); see also Morphew v. United States, 909 F.2d 1143, 1145 (8th Cir.

1990). We examine de novo the district court’s application of the guidelines and

review findings of fact for clear error. United States v. Mashek, 406 F.3d 1012, 1017

(8th Cir. 2005).

We conclude that the district court did not err by finding that both Allen and

Sylvester were organizers or leaders of this criminal activity. Both defendants

admitted that they arranged for the filing of tax returns by other individuals, recruited

the participants, and provided the fraudulent W-2 forms. They also testified that they

directed the recruited participants to take the fraudulent W-2 forms to tax preparers,

and urged the participants to apply for refund anticipation loans. For at least some of

the transactions, Allen and Sylvester 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

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preparer when the loan check or refund was ready, and they also typically held the

copies of the tax returns filed by the participants.

At the brothers’ sentencing hearing, Special Agent Timothy Nichols, an agent

for the IRS Criminal Investigation Division, summarized information he gathered

from interviews of 29 of the participants in the criminal activity. Nichols testified that

the participants “typically use[d] the same W-2s or the same employers on many of

the W-2s,” that they kept “$1500 of the federal tax refund and the entire state refund,”

while the “balance of the federal refund then would go to the people . . . orchestrating

the scheme,” and that the “wage and withholding amounts are very similar on some

of the W-2s[,] . . . some of them to the penny.” (S. Tr. at 38). Several of the

participants he interviewed explained that “the physical description of the person or

persons involved in the scheme [was of] a black male with braids[,] or twins,” (id.),

and “[s]ome of them knew [the brothers] by name, Allen and Sylvester, and/or Allen

and Star.” (S. Tr. at 39). One participant further explained to Nichols that “[s]he

thought [the two Mickle brothers] were equally involved” in the scheme. (S. Tr. at

17). Nichols testified that from the information he learned through these interviews,

he concluded that Allen and Sylvester fit “[a]t the top” of this conspiracy. (S. Tr. at

47).

The admissions of the defendants and the evidence gathered by Agent Nichols

provided a sufficient foundation for the district court to conclude that the Mickle

brothers recruited accomplices, helped plan the offense, claimed a right to a greater

share of the proceeds, and exercised control over other participants by setting the

terms of the arrangement. They also accompanied other participants at critical points

in the process, and maintained possession of important documents. Allen argues that

he played a more limited role in the conspiracy than Sylvester and should not have

been characterized as an organizer or leader. While Sylvester played a lead role in

obtaining or creating the fraudulent W-2 forms, and accompanying participants to

receive a refund check or refund anticipation loan, it is not necessary that each

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organizer or leader be responsible for the same actions in the criminal scheme or even

that each party with an aggravating role be equally culpable. See United States v.

Antillon-Castillo, 319 F.3d 1058, 1060 (8th Cir. 2003) (“A defendant need not be the

leader of an organization . . . in order to be a leader under § 3B1.1(a).”). Allen’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. The district court’s finding regarding Allen’s role in the

offense was not clearly erroneous.

II.

Allen also contests the district court’s conclusion that he was jointly responsible

with Sylvester for the entire tax loss involved in the conspiracy. The district court

found that the total tax loss, defined as “the loss that would have resulted had the

offense been successfully completed,” USSG § 2T1.1(c)(1) (2002), was between

$200,000 and $400,000, which corresponds to a base offense level of 18. USSG

§ 2T4.1(G), (H) (Supp. Jan. 25, 2003). Allen argues that because of his relatively

limited participation in the conspiracy, as contrasted with his brother Sylvester’s role,

he was responsible for only $80,000 to $120,000 of the tax loss, which corresponds

to a base offense level of 16. Id. § 2T4.1(F), (G). Allen contends that the offense

conduct was not a single conspiracy encompassing all of the conspirators and

transactions, but rather a set of multiple conspiracies, some of which he says involved

Sylvester but not Allen. Allen asserts that he should not be accountable for a subset

of conspiracies in which he was not involved.

Each defendant in a “jointly undertaken criminal activity” is accountable for his

own conduct and for “all reasonably foreseeable acts and omissions of others in

furtherance of the jointly undertaken criminal activity.” USSG § 1B1.3(a)(1)(B)

(2002). Thus, to attribute offense conduct to a particular defendant, the district court

must find that the conduct was in furtherance of the conspiracy, and reasonably

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foreseeable to the defendant. United States v. Rogers, 982 F.2d 1241, 1246 (8th Cir.

1993); see also United States v. Mellen, 393 F.3d 175, 183 (D.C. Cir. 2004).

The district court found that the entire loss was “reasonably foreseeable in

furtherance of jointly undertaken criminal activity,” and we conclude that this finding

was not clearly erroneous. Allen pled guilty to count one of the superseding

indictment, which charged that he conspired with Sylvester and others to defraud the

United States by obtaining payment or allowance of false claims from February 23,

2002, through April 2003. The indictment alleged that while both brothers

participated in certain fraudulent transactions, on some occasions – within this single

conspiracy – “only one of the defendants or another co-conspirator” would take the

participant to file a false tax return with the tax preparer, or to pick up the check with

proceeds from the refund anticipation loan. (R. at 3, 4). The conspiracy count also

alleged that “[a]s a result of the defendants’ conspiracy, over $200,000 of false claims

were made to the Internal Revenue Service.” (R. at 5).

We have held that when a defendant pleads guilty, he “admits all of the factual

allegations made in the indictment,” at least where he does not specifically state that

he disagrees with certain facts recited in the charging document. United States v.

White, 408 F.3d 399, 402-03 (8th Cir. 2005) (internal citation and quotation omitted).

In this case, Allen agreed that “during the years 2002 and 2003,” he and his brother

arranged for the filing of tax returns by other individuals, (Plea Tr. at 26-27), and

Allen never disputed any of the specific factual allegations in the charges to which he

pled guilty. Under those circumstances, Allen is foreclosed from arguing at this stage

that the false claims making up the $200,000 loss alleged in the conspiracy count were

not actually part of the conspiracy to which he pled guilty.

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III.

Allen also argues that after the district court found that he accepted

responsibility for his offense and decreased his offense level by two levels in

accordance with USSG § 3E1.1(a) (2002), the court erred by not decreasing the

offense level by one additional level pursuant to § 3E1.1(b). The latter subsection

provided, as of the date of the offense, that if a defendant qualifies for the two-level

decrease under § 3E1.1(a), then the court should apply the additional one-level

decrease if the defendant has assisted authorities by “timely notifying authorities of

his intention to enter a plea of guilty, thereby permitting the government to avoid

preparing for trial and permitting the court to allocate its resources efficiently.” 

The district court applied the two-level decrease under § 3E1.1(a), but then

declined to decrease the offense level by the additional level, not because of any

“delay in the trial preparations,” but rather because Allen “greatly minimized his role

in this case,” and had not sufficiently embraced his guilt. (S. Tr. at 203). This was

error. Once the court found that Allen accepted responsibility for his offense, it did

not have discretion to decline to decrease the offense level by an additional level for

reasons unrelated to the steps described in § 3E1.1(b). United States v. Rice, 184 F.3d

740, 742 (8th Cir. 1999). If Allen timely notified authorities of his intention to plead

guilty, then he should have qualified for a three-level decrease. 

Nevertheless, we conclude that the error was harmless. “If the sentence

imposed falls within the guideline range urged by the appellant and if it is clear that

the sentencing court would have imposed the same sentence regardless of whether the

appellant’s argument for a lower guideline range ultimately prevailed, there can be no

reversible error in the sentence.” United States v. Harris, 390 F.3d 572, 573 (8th Cir.

2004) (internal quotation and citation omitted). Had Allen received a three-level

adjustment under § 3E1.1, the resulting sentencing range under the advisory

guidelines would have been 63-78 months’ imprisonment, rather than the range of 70-

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87 months used by the district court. The sentence of 70 months imposed by the

district court falls within both advisory ranges. The court specifically announced,

moreover, that it would have imposed a 70-month sentence even if it had applied the

full three-level decrease for acceptance of responsibility. The court explained that

“whether one approaches it from the sentencing guideline analysis that I have

discussed or from a more general overarching theme of the objectives for sentencing

as they are set forth in Section 3553(a) ... [s]eventy months is the appropriate sentence

given the totality of the circumstances.” (S. Tr. at 212). We conclude that the sentence

was reasonable with regard to § 3553(a), and the error in calculating the advisory

guidelines was harmless. See Mashek, 406 F.3d at 1017.

IV.

Finally, the Mickles challenge the district court’s order of restitution to the State

of Minnesota and the private financial institutions from whom the conspirators

obtained refund anticipation loans. They contend that because the offense of

conviction was limited to a conspiracy to defraud the United States, the court was

authorized to order restitution only to the federal government. 

The Mandatory Victims Restitution Act (“MVRA”) provides that in a case

involving an offense against property, including any offense committed by fraud or

deceit, the district court shall order restitution to “the victim of the offense.” 18

U.S.C. § 3663A(a)(1), (c)(1)(A)(ii). A “victim” means “a person directly and

proximately harmed as a result of the commission of an offense for which restitution

may be ordered including, in the case of an offense that involves as an element a

scheme, conspiracy, or pattern of criminal activity, any person directly harmed by the

defendant’s criminal conduct in the course of the scheme.” 18 U.S.C. § 3663A(a)(2).

We consider de novo the district court’s application of the MVRA, and review the

restitution order for abuse of discretion. United States v. Liner, 435 F.3d 920, 926

(8th Cir. 2006).

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The Mickles pled guilty to an offense that involves a conspiracy as an element.

Although the offense of conviction involves a conspiracy to defraud the United States,

the MVRA authorizes an order of restitution to any person “directly and proximately

harmed” as a result of the conspiracy, even if the offense of conviction did not require

proof of an agreement to defraud those particular victims. Count one of the

superseding indictment detailed a conspiracy in which the object was “to obtain

money from the United States through the Internal Revenue Service, from the State

of Minnesota through the Department of Revenue, and through various financial

institutions by filing false state and federal 2001 and 2002 income tax returns claiming

refunds to which the co-conspirators knew they were not entitled and, in some

instances, obtaining ‘Refund Anticipation Loans.’” (R. at 2 ¶ 3) (emphasis added).

As part of the charged conspiracy, the defendants directed co-conspirators to hire tax

preparers to file returns based on the fraudulent W-2 forms, and to apply for refund

anticipation loans from the tax preparers. (R. at 3 ¶ 8, 4 ¶ 10). In addition, the

indictment charged that co-conspirators filed fraudulent federal and state tax returns,

and asserted that the filing co-conspirators were generally allowed to keep the entire

state refund. (R. at 2 ¶ 4, 5 ¶ 13). 

The defendants admitted that obtaining state tax refunds and loans from private

financial institutions based on false tax returns was part of the conspiracy to which

they pled guilty. (Plea Tr. at 28-29, 33-35, 65, 67-72, 74, 76-77); see White, 408 F.3d

at 402-03. The harm to the State of Minnesota and private financial institutions was

directly and proximately caused by the offense conduct, as the persons recruited to file

false tax returns obtained refund anticipation loans or state tax refunds as a direct

consequence of preparing or filing the false documents arranged by the Mickles. The

district court thus did not err in concluding that the MVRA authorized restitution to

these parties. The court’s decision to order restitution in the amount of the actual

losses caused by the criminal conduct, approximately $127,000, was not an abuse of

discretion.

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* * *

For these reasons, the judgment of the district court is affirmed.

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