## F I L E D United States Court of Appeals Tenth Circuit 

### DEC 9 2002 

### PATRICK FISHER Clerk 

### PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

UNITED STATES OF AMERICA, Plaintiff - Appellee,

v. DARRYL J. PETERSON, Defendant - Appellant. No. 02-3076

Appeal from the United States District Court

for the District of Kansas (D.C. No. 01-CR-40053-01-SAC)

On the Briefs: David J. Phillips, Federal Public Defender and Mari lyn M. Trubey, Assistant Federal Public Defender, Topeka, Kansas, for Defend ant-Appellant. Eric F. Melgren, United States Attorney and Nancy L andis Caplinger, Assistant U.S. Attorney, Topeka, Kansas, for Plaintiff-Appell ee.

Before SEYMOUR , HENRY and BRISCOE , Circuit Judges.

SEYMOUR , Circuit Judge.-2-

Darryl J. Peterson was convicted of mail fraud and tax evasion and sentenced to thirty months on each count, to run co ncurrently. He now challenges the district court’s sentencing decision on two gro unds. He contends the court erred in determining the amount of loss and in refu sing to group the two counts of conviction. For the reasons set forth below, we af firm.

I During a three year period of contract employment w ith two companies, Midwest Staff Leasing, L.L.C., and Midwest Construc tion Staff Leasing, L.L.C., Mr. Peterson embezzled funds and used the mail to c over up his embezzlement. In addition, he failed to report the embezzled fund s on his income tax returns. In fact, he failed to file any individual income tax r eturns or pay any individual income taxes for a period of three years roughly co inciding with the embezzlement. In that same period, no employment t axes were withheld from his salary. Although Mr. Peterson did file a tax retur n for the last calendar year in which he embezzled funds, he did not include the em bezzled amounts as income. Mr. Peterson was charged with one count of mail fraud in violation of 18 U.S.C. § 1341, and one count of tax evasion in viol ation of 26 U.S.C. § 7201. He pled guilty on both counts. At the sentencing stag e, the district court calculated Mr. Peterson’s base offense level from its determin ation of the amount of loss-3-

sustained. The court considered arguments on the p ossibility of a multiple count adjustment, but declined to group the counts. Mr. Peterson challenges both the amount of loss and the refusal to group the counts.

II For the purpose of determining a base offense level , the district court was required to calculate the total amount of loss resu lting from Mr. Peterson’s illegal activities. We review factual determinations such as this for clear error. United States v. Schild, 269 F.3d 1198, 1200 (10th Cir. 2001). The district court explicitly referred to the evide nce it considered on the amount of loss, including the victim’s spreadsheets itemizing each check written during the relevant period and noting whether each check was authorized or not. The court also considered the victim’s affidavit as to the amount of loss. Although Mr. Peterson asserts the amount was actual ly much lower than the figures put forward by the victim, he has not point ed to any evidence supporting the figure he advocates, nor any evidence disputing the reliability of the victim’s calculations. He simply contends instead that the district court erred in making its determination based on what he asserts were “self-s erving statements of the victim,” not amounting to a preponderance of the ev idence. Aplt. Br. at 7. Based on the evidence before it, the district courtdetermined by a-4-

preponderance of the evidence that the total amountof loss as a result of Mr. Peterson’s embezzlement was $529,006.99. We are no t persuaded the court clearly erred in reaching this result.

III Having determined the base offense level, the distr ict court considered Mr. Peterson’s arguments in favor of grouping the tax e vasion and mail fraud counts for a multiple count adjustment pursuant to U.S.S.G . § 3D1.2(c). That guideline provides: All counts involving substantially the same harm sh all

be grouped together into a single Group. Counts in volve substantially the same harm within the meaning of t his rule:

. . . (c) When one of the counts embodies conduct that is treated as a specific offense characteristic in, orother adjustment to, the guideline applicable to another of the counts. Mr. Peterson contended the two counts of convictionshould be grouped under § 3D1.2(c) because the guideline for tax evasion in U .S.S.G. § 2T1.1(b) includes a two level increase for the failure to report income exceeding $10,000 in any year from criminal activity. Two levels were thus added to Mr. Peterson’s base offense level for income generated by the mail frau d pursuant to § 2T1.(b). Nevertheless, the district court was not persuaded that grouping was appropriate.1 U.S.S.G. § 3D1.2(d) provides that counts involve su bstantially the same

harm “[when] the offense level is determined largel y on the basis of the total amount of harm or loss, the quantity of a substance involved, or some other measure of aggregate harm, or if the offense behavi or is ongoing or continuous in nature and the offense guideline is written to cove r such behavior.” -5- We review de novo the district court’s interpretation and applicatio n of the sentencing guidelines. United States v. Chavez-Valenzuela, 170 F.3d 1038, 1039 (10th Cir. 1999). The circuits are divided over wh ether to group mail fraud and tax evasion under § 3D1.2(c). We have not directly addressed the question in the context of that guideline, but have done so under § 3D1.2(d). See United States v. Lindsay , 184 F.3d 1138, 1142-43 (10th Cir. 1999) (holding mail fraud and tax evasion do not involve substantially same harm so s hould not be grouped). 1 Mr. Peterson points to a Fifth Circuit decision hol ding that the two crimes should be grouped under § 3D1.2(c) where, as here, the offense level for tax evasion is enhanced two points for unreported incom e from mail fraud. United States v. Haltom , 113 F.3d 43 (5th Cir. 1997). On the other hand, the Third, Fourth, and Sixth Circuits have held that tax evasi on should not be grouped with mail or wire fraud or with money laundering. Weinberger v. United States , 268 F.3d 346, 354-55 (6th Cir. 2001) (rejecting groupin g of tax evasion and mail fraud counts); United States v. Morris , No. 00-4043, 2000 WL 1260162 (4th Cir. Sept. 6, 2000), cert. denied, 531 U.S. 1203 (2001) (no error in refusing to gro up money laundering and tax evasion counts); United States v. Vitale , 159 F.3d 810,-6-

813-15 (3d Cir. 1998) (declining to group wire frau d and tax evasion). The Third Circuit dismissed the Haltom rationale as unpersuasive, and expressly declined to follow an advisory issued by the Sentencing Commiss ion’s Training Staff stating that tax evasion should always be grouped with mail or wire fraud. Vitale , 159 F.3d at 815 (affirming reasoning in United States v. Astorri , 923 F.2d 1052 (3d Cir. 1991), and declining to followQuestions Most Frequently Asked About the Sentencing Guidelines , Vol. V, March 1, 1992). The Training Staff advis ory is not binding and does not represent the Commission’s official position on the
matter. Id. at 815. The Third Circuit reasoned that tax evasi on and wire fraud represent different criminal conduct and grouping t hem in this type of case “would have the anomalous result that an enhancemen t designed to increase a sentence has the effect of reducing it.” Id. at 814. When we addressed grouping counts of mail fraud andtax evasion under U.S.S.G. § 3D1.2(d), we held that the two offenses involve different harms and should not be grouped. Lindsay , 184 F.3d at 1142-43. In declining to group these two crimes, we pointed out that the victims of the offenses are distinct because society is harmed by tax evasion, whereas an indivi dual is harmed by mail fraud. Moreover, we said the offenses involve distinct beh avior, and the measures of harm attributable to each offense are distinct. Id. at 1143. Relying on Lindsay , the district court here similarly emphasized the di fferences between tax evasion-7-

and mail fraud: To put it succinctly, the mail fraud and tax evasio n convictions are based on different elements, affected different vic tims, and involved different criminal conduct. To commit these crimes , the defendant had to make separate decisions to violate differentlaws. These differences, as well as the different harms, demons trate the convictions are not “closely related” for purposes of § 3D1.2. Moreover, the court believes the specific offense c haracteristic for failure to report criminally-derived income is not sufficiently based here on conduct embodied in the mail fraud co unt as to warrant grouping. Section 2T1.1(b)(1) speaks to the defend ant failing to report or identify the source of income coming from criminal activity. The conduct embodied in the mail fraud c onviction was the defendant obtaining by mail the checks written by M s. Arnold for employment taxes and using those monies to conceal what he had embezzled from the companies. The defendant also u sed the mail to have the company’s bank statements sent directly to him in order to keep others from learning about his embezzlement. In other words, the specific offense characteristic for the tax eva sion count relates to the defendant’s subsequent decision and conduct reg arding the tax treatment of those monies he embezzled from the companies, and this conduct is not embodied within the defendant’s use of the mail to conceal the embezzlement from the victims. The cou rt finds this is not a situation of double counting. Rec., vol. II, Ruling on Objections to the Presente nce Report at 9-10 (citation omitted). We agree with the district court’s reasoning and we note as well that the enhancement in § 2T1.1(b)(1), the tax evasion guide line, serves a different purpose than the enhancement in § 2F1.1(b)(1)(k), the mail fraud guideline, which is yet another reason there was no impermissible do uble counting in this case. See United States v. Flinn , 18 F.3d 826, 830 (10th Cir. 1994) (no double counting-8-

where enhancement provisions serve different purpos es). The purpose for the increase under § 2F1.1(b)(1)(k) is to account for the seriousness of the crime in terms of the amount of money involved. The purpose for the increase under § 2T1.1(b)(1) is to account for the fact that [c]riminally derived income is generally difficult to establish, so that the tax loss in such cases will tend to be substant ially understated. An enhancement for offenders who violate the tax laws as part of a pattern of criminal activity from which they derive a substantial portion of their income also serves to implement th e mandate of 28 U.S.C. § 994(i)(2). U.S.S.G. § 2T1.1 Background. Applicaton Note 5 to § 3D1(c) elaborates on the app licability of the subsection, emphasizing that it applies only where the two counts are “closely related.” U.S.S.G. § 3D1.2(c), comment. (n.5). We are convinced that tax evasion and mail fraud are not closely related beca use the victims of tax evasion and mail fraud are not the same, the offenses invol ve distinct behaviors, the purposes of the enhancements are different, and the harms attributable to each crime are dissimilar. Accordingly, the district co urt correctly declined to group the tax evasion and mail fraud counts in this case.
We AFFIRM

.