## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it
N o. 11

- 3722 U NI T ED S TATE SOF A MERI CA, P la intif f-A pp ellee, v. J OHN Q UI NN M C K INNEY, D ef endant-Appellant.

A pp eal from the United S t ates Di strictC our t fo r the S outhernDi stricto f Illino is. No . 3:1 1-CR-30 02 9-DRH

—David R. H ern don, Chief Ju dge
. A RGUED J UNE 8, 2012

—D ECI DE D J UL Y 13, 2012

B efore P OSNER, F LA UM, a nd W I L L I A MS, C ircu it Judges . F LA UM, Circu itJudg e . Joh n M c K in n ey , alon g w ith h is w ife, b r o t h e r , a n d s i st er -in -law , w as ch ar ge d in a n e l e v e n- c o un t i nd i c t men t wi th c o ns pi r a c y t o def r a ud , i m pede, i m pai r, o bstru ct, and defeatthe functi ons of the I RS in the col l ecti on o fi ncom e t axes, 18 U
. S. C. § 3 71; ta x ev asi on, 26 U
. S. C. § 7 201; and f al se sta tem ents to re venue a gents , 26 U
. S. C. § 1 001. M c K i nney e nter ed a pl ea a g r ee m en t an d a f ac tu als ti pul at i o n wi ththe g o ve r n-2 N o. 11

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m en t. At se nt en cing, he r ec ei ve d a two- l ev ele nha nc ement t o h i s b a s e o ffe ns e l e v e lf o rf a i l i ngto r e po r ti nc o me e xc e e di ng $1 0, 000 fro m cr i m i nalact ivity, U
. S. S EN T EN CI NG G UID ELINE S M ANUAL ( “U
. S. S. G.” ) § 2 T1. 1( b) ( 1) , as wellas a t wo - l e v e le nh a nc e men tf o ro b s t r uc t i o n o fj us t i c e , U. S
. S
. G. § 3 C1. 1. H e a pp eal s these enhancem ents. W e a ffirm th e d ist ric t c ou rt
.

I . B a c kg r o und A . Tax Evasi on M c Ki nn e y a nd h i s b r o the rR o b e r to wn a nd o perat e M cK i nney Hau l i ng, a const ructi on busi ness. I n ear l y 2 003, th e I RS f i l ed a N o tice of Fed eral T ax Li en s ag ains t M cKi nne y f o rt ax es o wed. The r ea fte r, the I RS pu rs ued col l ecti on m ult i ple ti m es. M cK i nn ey avo i ded pay i ng t a xe s b y t r a ns fe r r i ng mon e y e a r ne d f ro m hi s co nstr ucti on business i nto separ ate nom i nee a ccounts, whi chM cKi nne y a nd hi s b rotherus ed f o rpe r so na la nd ho us eh o l d expe ndi tu r es . H e co nc ur r en tly pro vi ded to I RS Revenue Offi cer s f al se sta tem en ts abo ut hi s abi l i ty to pay the t axes he o w ed. H e fa i l ed to pay taxes du ring 19 99, 20 00, 20 02 , 200 3, 20 04 , 200 5, an d 20 06
. Because o fthe federa lta x l i ens, M cK i nney was unabl e t o ob ta in a re si den tia l m or tg ag e. T h er efo re , his w i fe, Ch am ethel e, i nd ependentl y a pp l i ed f orand obt ai ned a l o a n t o p ur c ha s e a ho me i n M a di s o n Co un t y, I l l i no i s . On h e ra p p l i c a t i o n, s h e f a l s e l y s t a t e d th a ts h e w a s a fu l l

- t i me m an ag er of M c K in n ey H au lin g w ith a gro ss m on th ly i ncom e o f$1 5, 374. 23. H erhusband si gned a f al se em plo y-N o. 11

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m ent v er i fi c at ion d oc u m en t t o c on firm h er rep re se n ta ti ons. H e, however, ea rned the i ncom e use d to pay f orthe hom e. Ac c o r d i n g l y, th e mo r t g a g e fr a u d d i v e r t e d b u s i n e s s i n c o me ea rn ed by M c K in n ey int o a n as s e t p u r c h as ed by h is wi fe , e n ab l i n gh i m t o a v o i d th e I R S t a x a s s e ss m en t and l i en. Cham e the l e M cK i nney def aul ted o n the m or tga ge on J uly1, 20 08. M c K in n ey ’s s ist er -in -l a w , B elin d a M c K in n ey , sim ilar ly appli ed f ora l oan to pu rchas e a hom e in M adis on County, I l l i n o i s . S h e , t o o , f a l s e l y de c l a r e d th a ts h e w a s a fu l l

- t i me e mp l o y e e o fMc K i n n e y H a u l i n g, th a ts h e ha d b e e n e mpl o y ed f o rte n ye ar s, and tha t s he ea r ne d $ 9, 50 0 permonth. The re si denti alm or tga ge l en d er cal l ed M cK i nney t o confi rm thatBel i nd a was a full

- ti m e e m plo yee . M cK i nney f a l s e l y r e p r e s e n t e d th a th i s s i s t e r - i n - l a w wa s a fu l l

- t i me em plo yee . S he di d no t re port such em plo ym ent on herta x r e t u r n . T h i s fi n a n c i a lt r a n s a c t i o n d i v e r t e d b u s i n e s s i n c o me earned by Rob er t M cK i nney into an as seto w ned by Bel i nda , the r eb y a vo i di ngthe I RS ta x as se ss m en t an d l i en .
B. Ob st ructi on ofJ usti ce I RS Re ve nue Offi cers i nt er vi ewe d M cKi nne y a nd hi s bro ther re gar ding thei r f ai l ure to pay i ncom e t ax es. Both M cK i nney a nd hi s br othe r m ade f al se sta tem ents re gar ding thei r actuali n c om e a nd as set s. On M ar ch 23, 20 07, M cK i nney f al sel y s tat ed that he l i ved at15 28 Gaty A ve n u e, E as t St . L ou is, St . C lair C ou n ty , I llin ois , w h en , in f act, he l i ved w i th hi s wife a t thei r M adis on County hom e. O n O c to b er 22 , 200 7, M c K inn ey st at ed th at h e a n d h is4 N o. 11

- 3722 bro therwere thi nki ng ab out cl osing thei r busi ness because th ey had no work, wh i ch w as untrue. On N ove m ber21 , 2007, a Revenue Offi cerco nd ucted a fi el d vi si t with M cK in ne y and his brothe r du ring w hich both broth ers i nd i cate d that they l acke d w or k a nd i ncom e. The se sta tem en ts wer e al so f al se : th ey r ec ei ve d i nc o m e j us t be f o r e an d afte rtha t m ee tingfr o m their c o ns truct i o n b us i ne ss . The f al se i nf o r m at i o n pr o vi ded by th e br o th er s ca us ed th e I RS to cl ose i ts i nvest i gat i on o n Decem ber13 , 20 07.

C. P r o c e dur a l B a c kg r o und F ede r ala utho r i ti es ul ti m at ely disc o ve r ed th e br o th

er s’ ta x eva si on, and, o n Feb rua ry 2 4, 2011 , theychar ged M cK i nney with one count o fco nspir acy, o n e c ou nt o fta x evas i on, and thr ee c ounts ofm aking f al se sta tem ents. M c K in n ey p led gu ilty to ea c h ch ar ge . The proba ti on o ffi ce fi l ed w i th the cou rt a Pres entence Investi gati on Repor t ( “PSR”) r eco m m ending enhancem ents f orf ai l i ng to r epor t the source of i ncom e exceedi ng $1 0, 000 i n any yea r from cr i m i nalact i vi ty and fo r obs tr ucti on o f j ust i ce. M cK i nney obj ecte d to both re com m ended enhancem ents. Fi rs t, he chal l enged the enhancem ent f or f ai l ure to re portthe sour ce of i ncom e exceedi ng $1 0, 000 i n any yea r fro m cr im in al a c ti v i t y a s in ap p lica b le t o h im be c au se h is wi fe, no t he , r ec ei ve d the mor tg age c he ck
. S ec o nd, he ar gued that the a dj ustm ent foro bstr ucti on o fj u sti ce for provi ding fal se i nfo rm ati on t o the I RS was i m proper because ( 1) the I RS co uld ha ve ver i fi ed the i nfo rm ati on soug ht, ( 2) the i nfo rm ati on r ega rdi ng hi s business w as ac c u rate, ( 3) hi s f al se sta tem ents did notr i se to the l eve lN o. 11

- 3722 5

co nt empl at ed bythe S en te nc i ngGui del i ne s, a nd ( 4) the I RS fi el d agent w as not acting as a l aw enf or cem ent a gent w hen h e m ad e t h e fa lse st at em en ts
. The dist ri ct courtente re d a j ud gm ent a gainst M cK i nney an d ad op te d th e P SR ’s re c om m en d a t i on s, tr ea tin g h is appl i cabl e Gui del i ne r an g e as 5 1- 63 months o fi m pr i so nm en t. I t se nt en ce d M cKi nne y t o 5 7 m o nths ’ i m pr i so nm en t on e ach co unt, to be ser ved c oncurr entl y. I t a l so i m posed thre e y ear s’ superv i sed r el eas e a nd o rder ed hi m to pay re sti tuti on o f$1 , 512, 384. 22.

I I . Discussi on W e r evi ew the dist ri ct c ourt ’ s a pp l i cati on o f the S entencing Guidel i nes de n ov o. See U nited Sta tes v. Sh e ne m an , N o. 11–31 61, 2012 W L 19595 51, at * 5 (7th C ir. Jun e 1, 2012 ). W e review its find ings of fact for clear error, i d. , inc lud ingi t s de ter m i nati on that M cK i nney’ s unchar ged i nvol vem ent in the m or tga ge fra u d schem e co nsti tutes c on d u c t r ele va n t t o h is t ax ev as ion, s e eU ni t e d S t at e s v. A cost a , 8 5 F
. 3d 275, 2 79 (7th Ci r . 1 99 6) , a nd i ts f actual fin d in gs u n d er ly i n g t h e o b st ru c tio n en h an c em en t, U nited St at e s v. Val l ar, 635 F.3d 271 , 288 (7th C ir. 2011).

A. E nha nc e me ntf o rF a i l ur e t o Re po r tI nc o me F r o m t he Un c h a r g e d Mo r t g a g e F r a u d S c h e me U nd erthe Gu i del i nes, the dist ri ct c ourtm ay i ncre ase M cK inn ey’s base offense level by tw o if he “fai led to rep ort o rt o c o r r ec tly i den ti fy the sou r ce o fi nc o m e ex ce eding6 N o. 11

- 3722 $ 1 0 , 0 0 0 i n a nyy e a rfr om cr i mi na la c t i v i t y . ” U. S
. S
. G. § 2 T1. 1( b) ( 1)
. T he di str i ct c ourtappli ed thi s e nhancem ent, fi nd i ng tha t M cK in n ey fail ed to r epor t t o the I RS $4 5, 000 that hi s wife r ecei ved fro m the m or tga ge l oan. M cK i nney cha llen ge s t h at th is e n h an c em en t w as im p ro p er bec ause ( 1) he had no du ty to re porti ncom e obtained by hi s wife fro m a t h ird p ar ty , an d (2) h e w as n otc h ar ge d w ith t h e s p ec ific cri m i nalact i vi ty re l ate d to the m or tga ge fra u d. W e di sagr ee.

1 . Du tyt o Re p o r tI n c o me Se c tion 2T1. 1( b) ( 1) o fthe Se ntenci ng Guidel i nes s tat es that the s entencing enhan c em ent a pp l i es up on the de f e ndant’s f ai l ure to reporti ncom e o ver$1 0, 000. Thus, i n M cK i nney’ s vi ew , Secti on 2T1. 1( b) ( 1) is i napp osi te si nce hi s wi fe , n o th e , p o c k e t e d the $ 4 5 , 0 0 0 h o me l o a n pr o c e e ds and the l oan w as i n hernam e. W e r ej ec te d M cKi nne y ’ s ar g um en t i n U nited Sta tes v. O es trei ch , hol ding that an i nd i vi du alwh ose spouse obt ai ned i ncom e thro ugh i l l ega lm eans shar es the du ty to re port s u c h i ncom e a nd m ay re cei ve a s entence enhancem ent s houl d that s pouse fail to do s o. 28 6 F
. 3d 1026 , 10 30

- 31 ( 7th C ir. 2 002 )
. In O es trei ch , a hu sba nd and w ife conspi re d to defr aud the Un i ted S tat es f orpurposes o f i m peding the I RS. T he d i str i ct c ourtco nsi dered wh etherto enha nc e th e wi fe’ s se nt en ce unde rS ec ti o n 2 T1
. 1(b) ( 1) , a nd i t co ncl ud ed tha t, as a parti ci pant i n the conspi ra cy to im p ed e th e I R S’ coll ection of tax es, sh e sha red her sp ou se’s ob li gat i on t o re portthe i ncom e a nd co uld r eas onab ly for es ee th at h e w ou ld n otrep or t it
. Id. at10 30- 31. A c-N o. 11

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co r di ng l y, i t f o und tha t her o wn f ai l ur e to r epo r t th e incom e m erited an en ha nc em en t un d er Section 2T 1.1(b)(1). As i n O es tr ich , M cK i nney a nd hi s w ife co nspir ed to p er p et ra te a m or tg ag e fra u d sc h em e. C h am et h ele M cK i nney fal sel y repr ese nted w here she w or ked i n or der to obt ai n th e h om e lo an, and herhusband, thr ough f al se em plo ym ent r eco rds, subst anti ate d her re prese ntati ons. They work ed to gether to obt ai n the $45, 000 l oan, wh i ch th ey both un d is p u t ed ly ha d a du ty to repo rt to the IRS, w hethervi a a j oin t re turn o r by one ofthem se parat el y. C h am et h ele M c K in n ey d id n otrep or t t h e in c om e, a r es ul t f o r es ee ab l e to M cKi nne y a s par ti ci pan t i n a nd b e ne fi c i a r y o fthe mo r t g a g e fr a ud
. H e , the r e f o r e , h a d a d u ty to rep or t t h e in c om e a s w ell. I n O es tr ich , we noted in dict a a poss ibl e tensi on be tw een the e xp r e s s u s e o fthe te rm “d e fe nd a nt ” i n U. S
. S
. G. § 2 T1
. 1 ( b ) ( 1 ) ( “ I f the de fe nd a nt f a i l e d t o r e po r t o r to correc tly i denti fy the so urce ofi ncom e e xceedi ng $1 0, 000 i n any yea r fro m cr i m i nalact i vi ty, i ncre ase by2 l eve l s. ”) an d t he passi ve phrasi ng o fU
. S. S. G. § 2 T1. 1( b) ( 2) ( “If the offe nse invol ved so phist i cate d m eans, i ncre ase by 2 l eve l s. ”)
. 28 6 F
. 3d at 1031
. One cou ld ar gue, we sugges ted, that the dist i ncti on between the secti ons’ l anguage m ea nttha t S ec ti o n 2T1
. 1(b) ( 1) appl i ed “ o nl y to the de fen dan t who f ai l ed to r epo r t an d no t to a co - co ns pi r at o rwho had no du ty to re port
. ” Id. M cK i nney r el i es on thi s di cta to unde r sc o r e th at he , as an unc ha r g ed co - co ns pi r at o ri n the m ortgage fraud , i s not resp ons ibl e for hi s w ife’s f ail ure to re port
. A ssum i ng ar guendo thatM cK i nney’ s r eadi ng o f Se c tio n 2T 1.1 (b )(1) is cor re c t, h e still c an n ot p re va il onth is8 N o. 11

- 3722 argu m en t. O ur d icta sug geste d that S e c t ion 2T 1.1(b)(1)’ s d efendant- speci fi c l anguage m ighti mm un i z e a co - conspi ra tor from th e e nh an cem en t w he n th e co-con sp irator had no du ty to repo rt
. Fi rs t, M cK i nney i s the defendant, not j ust a co - co ns pi r at o r, i n the t ax e va si o n sc he m e. The i ss ue , the n, i s whethe r, a s the de fen dan t, he ha d a duty t o r epo r t th e i ncom e a nd f ai l ed to do s o. M cK i nney, un d er ge nera l pr i nc i pl es o ffede r ali nc o m e tax law , was j o i nt l y a nd seve ra l l y l i abl e f or “any defi ci enci es, penal ti es and i nter est ass ess ed aga i nst [ hi m and hi s wife] r ega rdi ng [ a j oi nt] re turn, ” Kin dre d v
. Com m ’ rof Int e r nal Re ve nue, 45 4 F
. 3d 68 8, 69 3 n. 10 ( 7th Ci r . 20 06 ) , unl es s he was an “i nno ce nt spouse. ” Id. ( ci ti ng I RC § 6015 )
. H e m ostcer tainl y was not an in n oce nt spouse , and w e a re unconvi nced by hi s ar g um en t th at, s i nc e he di d no t fil e t ax es a t al ldur i ng the s ubj ect peri od, i t i s “ a st re tch t o fi nd a du ty to r e p o r ti n c o me . . . a s i fh e we r e fi l i n ga j o i n tt a x r e t u r n . ” He ask s us t o c o nc l ud e tha ts i nc e h e c o mm i t t e d c r i mi na lta x evas i on an d rec rui ted hi s wife into hi s s chem e, she al one, not he, i s r esponsibl e fordecl ar in g the incom e they obtained. W e d ec lin e t o tr eathi s cr i m i nalta x eva si on a s a boo n. S o l ong as the m or tga ge fra ud sche m e con st itu tes conduct r el evantto the conspi ra cy, ta x eva si on, and f al se st at em en ts w ith w h ich h e w as ch ar ge d , see U .S.S.G . § 1B1
. 3( a) ( 2) , the di st r i ctc o ur t co ul d find a duty t o r epo r t th e in c om e a n d co n sid er h is fa ilu re t o fu lfill th at ob liga tio n . See U. S
. S
. G. § 1B1
. 3( a) ( 1) ( st at i ngtha t a defen dan t’ s g ui del i ne r a n ge “s h all b e d et er m in ed on th e b as is of . .
. ( A) al l act s a nd o mi s s i o ns c o mm i t t e d, a i de d, ab e t t e d, c o un s e l e d, co m m an ded, i nduc ed, pro cur ed, o rwi l l ful l y c au se d b y the defe nd ant; and ( B) in the cas e o fa j oi ntl y undert ake nN o. 11

- 3722 9 cri m i nalact i vi ty ( a cr i m i nalpl an, sche m e, endeavo r, o r enter pri se und er tak en by the defe nd ant i n conce rt with o th er s, whethe ro rno t ch ar g ed as a co ns pi r ac y ) , a l lr ea so nabl y for ese eabl e a cts and om i ssi ons of othe r i n further ance of the j ointly un d ertaken crim inal activity”).

2. R ele va n t C on d u c t In q u iry W e m u st, th u s, ev alu at e w h et h er th e d ist ric t c ou rtcle ar ly er re d i n fin d i ng tha t the m or tga ge fra ud was conduct relevan t t o M cK inn ey’s con sp iracy to defrau d the IRS. Re l ev an t co nduc t i s defi ne d a s ac ts tha t we re “ par t o fthe sa m e co ur se o f co nduc t o r co m m o n sc he m e o rpl ana s th e o ffe ns e o fc o nv i c t i o n. ” U. S
. S
. G. § 1 B1
. 3 ( a ) ( 2 )
. A c o m m on sche m e o r pl an i nc l ude s two o r m o r e o ffen se s th at are c o n n e c t e d b y a c o mmo n f a c t o r, i n c l u d i n g c o mmo n a c c o mp lice s, co m m on p u rp os e, or c om m on m od u s o p er an d i. U
. S. S. G. § 1 B 1.3 , c m t. n. 9( A )
. Offenses thatar e no t par t o f a co m m o n s ch eme o rpl anmay sti l lc ons ti tu te the sam e co urse o fco nd uct i ftheyar e co nnected o r re l ate d to a degr ee to sugg estthattheyar e a parto fa “singl e e pis ode, spree o r ongo i ng se ri es ofo ffenses . ” Id. at cm t. n.9(B). A t sen ten cing, the d istri ct cou rt found that M cK inn ey’s fai lure to report inc om e from the m ortgage fraud w as “p art an d p a r c e l ” t o the t a x e v a s i o n, a dv a nc i nga c o mm on sch em e to hid e m one y and avoid pa ying tax es. T he cou rt foun d that, i n furth eran ce of his tax eva sion, M cK in n e y ’s w i fe obtained the m or tga ge l oan i n her nam e and perf al se em pl o y men ti nfo r mat i o n t o h i de h e rh usb a nd ’ s b us i ne ss i nc o m e an d a vo i d the I RS t ax a sse ss m en t an d l i en . M cK i nney’ s o w n f al se sta tem ents about hi s wife’ s e m plo ym en t e n ab le d h i s w ife t o ob ta inth e loa n . A c c or d in gly , i t10 N o. 11

- 3722 hel d that the m or tga ge fra u d w as part ofthe com m on schem e o fta x eva si on t o w hi ch M cK i nney pl ed guilty, m aking i t r elev an t co nd uct under the S entencing Guidel i nes. W e a ffirm th e d ist ric t c ou rt
. Se e S h e n em en , 2 0 1 2 WL 1 9 5 9 5 5 1 , at * 5 ( “ Un d e rth e c l e a re r r o rs t a n d a r d , we w i l laffi rm a dist ric t cour t unl ess we are l eft with the defi ni te and fi rm co nvi cti on that a m istake has be en com m i tte d.” ( quoti ng U nited Sta tes v. R eese, 66 6 F
. 3d 1007, 1021 ( 7th Cir. 2012) (int erna l qu otation m arks om it t e d )) ). The St i pu l ati on o fF acts , wh i ch M cK i nney does notdi spu te, st ate s that he avo i ded the I RS tax a sse ssm ent a nd l i en by dive rt i ng asset s int o thi s lo an. H e thereby concedes that the m or tgage fr aud ser ved the com m on s chem e o fta x evas i on, a connect i on a l so ev id en ced by the f act that bo ths ch emes s hared co m m o n a cc o m pl i ce s an d m o dus o pe r a nd i

—al lf o urM cKi nne y s wer e co m pl i ci t i n b o ththe m o r tg ag e fr au d a nd the t ax e va si o n. W e ho l d, ther ef or e, that the m or tga ge fra ud was conduct re l evantto M cK i nney’ s t ax ev asi on, thathe ha d a duty t o re portthe in c om e fro m th e fra u d u len tly ob ta in ed m or tga ge loa n, a n d t h at th e d ist ric t c ou rtp ro p er ly c on sid er ed h is f ai l ure to re portas i t f ashi oned i ts sente nce.
B. Enh ancem ent f orO bstructi on ofJ usti ce M cK i nney a l so appe als the dist ri ct c ourt ’ s tw o- l eve l en ha nc e m en t for obstru ction of j us tice. T he district cou rt concl ud ed that hi s f al se sta tem ents re gar ding hi s r esi dence and em plo ym ent s tatus w ar ra nted a n adj ustm ent forN o. 11

- 3722 11 obs tr ucti on o fj usti ce under Se cti o n 3C1. 1, wh i ch st ate s that a d efend an t com m its obstru ction if: ( 1 ) the de fe nd a ntwi l l ful l y o b s t r uc t ed ori mpe de d, orat tem pted to obs tr uct o r i m pede, the adm i ni str ati on o fj us ti ce wi thr es pec t to the i nv es ti g at i o n, pr o se cut i o n, o rs en te nc i ng ofthe i ns ta nto ffen se o fc o nv i ct i o n, a nd ( 2) the ob str uct i ve c o nduc t r el at ed to ( A) th e defen dant’s offense of convi cti on and any r el evantco nd uct; or (B ) a c los ely rela te d offe n se [.] U. S
. S
. G. § 3 C1. 1. M cKi nne y a r g ue s th atbecaus e th e f al se sta tem ents w er e m ade pri orto t h e ini ti ati on o f a c ri m i n a l inv es tig at ion, th e a dj u st m en t s h ou ld ap p ly on ly if h is c on d u c t w as “p u rp os ely ca l c u lat ed , an d likely to thw ar t the i nvest i gat i on o r pros ecuti on o fthe offense ofco nvi cti on. ” Id
. at cm t. n. 1. H e posi ts that l i es to federa l offi cer s, witho u t m or e, cannot ri se to the l eve lo fo bstr ucti on forpurposes o fa sente nci ng enhancem ent. A s a n i ni ti alm att er, i t i s o f n o m om ent that a cr i m i nal i nvest i gat i on had notbee n i ni ti ate d at the ti m e M cK i nney l i ed to IRS agents. Secti on 3C1. 1 penal i zes “obstr ucti ng o r i m p edingthe a dm i ni st r at i o n o fj us ti ce . ” Tho ug h the cri m i nali nvest i gat i on had not y et begun, the I RS was in ve st iga tin g M c K in n ey ’s t ax ac tiv itie s, w h ich ev en tu ally and i nevi tabl y m er i t e d furtheri nvest i gat i on a s cr i m i nalta x ev as ion . Th e fa c t th at th e inv es tig at ion or igin at ed as civ il, no t cr i m inal, do es no t l eg i ti m i ze M cKi nne y ’ s l i es a nd at te m p ts to fru st ra te th e g ov er n m en t’s inq u iries
. N eve rthel ess , pro vi ding f al se sta tem en ts ori ncom ple te or m i sl eadi ng i nfo rm ati on to l aw enf or cem ent, i fnotunder oa th , d oe s no t con st itu te ob st ru c tio n if th e in ve st iga tio n is12 N o. 11

- 3722

n otac tu a lly ob st ru c te d or im p ed ed
. Se ei d. at cm t. n.5(B); U nite d States v. Sel vie, ___F.3d
____, 201 2 W L 24 77 83 5, at *3 ( 7th Ci r. J une 29 , 2 01 2)
. The go ver nm ent m ust e stabl i sh th a tth e d e fe n d a n t ’ s d i s i n f o r ma t i o n wa s ma t e r i a la nd obs tr ucted ori m peded the offi ci ali nvest i gat i on o r pros ec u tio n oft h e in st an t o ffen se . See U
. S. S. G. § 3 C1. 1 cm t. n .4(G ). Th e in for m a t i o n i s m at er ial if, w er e itbe liev ed , i t “w ou ld ten d to influen ce or affect th e is su e un d er de term i nati on. ” Id. a t cm t. n. 6. The m i si nfo rm ati on obstr ucts orim p ed es the invest i gat i on i fi t “ burden[ s] l aw enf or cem ent a nd pre ci pit ate [s] ‘ expend ed re sour ces to tr ack dow n i ts f al se l eads. ’ ” SeeSe lvie, 201 2 W L 24 77 83 5, at *3 ( quoti ng Uni t e d S t at e s v . Gr i f f in , 31 0 F
. 3d 1017, 10 23 ( 7th Cir
. 20 02) )
. ” M cK i nney’ s li es to the I RS sa ti sfy b oth cri ter i a. M cKi nne y m ade f al se st at ement s to an I R S Re ve nue O ffice r on th re e o c c as ion s. O n M ar c h 23 , 200 7, h e fa lse ly sta ted thathe l i ved ata hom e in St
. Cl ai r County, I l l i noi s, w h en h e ac tu ally live d in M ad iso n C ou n ty , I llin ois w ith h is w i fe. On October22 , 20 07, he s tat ed that he and hi s br othe r w er e thi nki n g ab out cl osing the door s o fthei r busi ness because they did not have any c urr ent work
. In tr uth, they did have work, i ncl ud i ng a dem ol i ti on forwh i ch they i ssued an invoi ce o n Octobe r 27, 20 07. On N ove m ber21 , 2007, th e broth ers told an I R S agen t d uring a fiel d i nt ervie w t h at they did nothave any i ncom e o r w or k. In f act, on the sa m e day they m ade a deposi t o f$7, 500 fro m Keel ey & S ons and re cei ved and ad dit i onal$2 40, 377 fro m Keel ey & S ons du ring 20 07. These l i es w er e m ate ri albec ause they “in flu en c e[d ] o r affe c t[e d ] th e is su e u n d er d et er m in at ion,” U .S.S.G
. § 3C 1.1 c m t. n .6, w h et h er th e M c K in n ey s co u ld aff o r d t o pa y the i rta xe s o wed. M o r eo ve r, the y c au se d theN o. 11

- 3722 13 I RS t o c l o se i ts i nv es ti g at i on by r epr es en tingthe M c Ki nn e y s ’ i nab i l i t y t o p a y o n the b a s i s o ffi nanci al hardshi p, thwarti ng the IRS’ d i sco ver y o fthe cri m i nal i ty of the t ax ev asi on

— a t lea st te m p or ar ily

—an d de m an di ng a ddi t i o na l g o v e r nme ntr e s o ur c e s t o u nc o v e rthe fr a ud
. See U .S .S .G . § 3C 1.1 cm t. n .4(G ); Sel vie, 20 12 W L 24778 35, at *3-4 . H is a c tio n s m er ite d an ob st ru c tio n en h an c em en t. W e a re notper suaded by M cK i nney’ s a sse rt i ons to the c ontr ar y. H e re fers us to U nited Sta tes v. U rba nek, 930 F. 2d 1512 , 15 15 ( 10th Cir
. 19 91) , i n w hi ch the Tenth Cir cui t fou nd the defe nd ant’ s f al se sta tem ents to I RS ag ents denyi ng the exi ste nce o fban k a ccounts orta xabl e incom e t o be “ nothi ng m or e than a deni al ofgui l t o r an ‘excul pator y no . ’ ” Id. U nd erthe Gu i del i nes, th e cou rt held , refusing to ad m it guil t o r v o lu nt eer inform ati on ca nnot underl i e a n obs tr ucti on e nhancem ent. U nlik e th e defen dan t i n U rba nek, M c K in n ey d id not m er el y deny w ro ngdoi ng, bu t affi rm ati vel y l i ed t o the I RS. H e li e d ab o uth i s p a s tfi na nc e s , h e ma de f al se re prese ntati ons about the c urr ent a nd future sta te ofhi s business, and he l i ed a b out w here he l i ved to concea lthe val ue o fhi s ho m e. M or eov er, unl i ke i n U rba nek, wh er e the defendant i m m edi ate l y r ecante d his li e w he n con fronted w ith th e truth , M cK inn ey’s f al se s ta te m en ts hind er ed th e I RS i nv es ti g at i o n a nd ca us ed th e ex pen di ng o f a ddi ti o na l t i m e an d man po we r t o uncover and pros ecute the t ax evas i on s chem e. There f or e, w e concl ud e that M cK i nney ob st ru c te d j u st ice , an d t h e d ist ric t c ou rtp ro p er ly enhanced hi s ba se offense l eve lacc or dingl y.14 N o. 11

- 3722 I I I . Concl usio n Forthe f or ego i ng r eas ons, we AF FIRM .

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