In the

United States Court of Appeals

For the Seventh Circuit

Nos. 00-3004, 00-3006

United States of America,

Plaintiff-Appellee,

v.

Kenneth P. Kontny and Joann L. Kontny,

Defendants-Appellants.

Appeals from the United States District Court

for the Western District of Wisconsin.

No. 00-CR-4--John C. Shabaz, Chief Judge.

Argued December 5, 2000--Decided January 4, 2001

 Before Posner, Easterbrook, and Evans, Circuit Judges.

 Posner, Circuit Judge. The Kontnys were

convicted of fraudulent nonpayment of federal

payroll taxes and sentenced to prison. Their

appeal complains about the denial of their motion

to suppress documents and statements that they

gave to an Internal Revenue Agent and about a

sentencing increase that they received by virtue

of the "sophisticated" character of their fraud.

 The Fair Labor Standards Act requires employers

to pay their hourly employees time and a half for

overtime (that is, hours worked above 40 hours a

week), but, of course, the overtime wage is

taxable income to the employee. To defeat both

the overtime and tax laws, the Kontnys, who own

an equipment-supply business that employs 25 to

30 workers, concocted the following scheme. They

would pay the workers normal wages rather than

time and a half for overtime work but not report

the overtime wages to the government as taxable

income, thus making it easy (or easier) for the

workers to avoid detection if they did not report

this income on their tax returns. The employees

benefited from this scheme by obtaining a greater

after-tax income and the Kontnys by not paying

either overtime wages at the rate of 1.5 times

regular wages or payroll taxes on the overtime

wages.

 The scheme continued for at least a decade until
the Kontnys became embroiled in a bitter labor

dispute with their workers. One of them decided

to tattle to the government. He visited an office

of the IRS and was interviewed by Special Agent

Babbitt, a criminal investigator. The matter was

turned over to Revenue Agent Furnas to

investigate. Revenue agents, unlike special

agents, conduct civil rather than criminal

investigations. Furnas interviewed a number of

employees of the Kontnys’ company and concluded

that despite their disgruntlement over the labor

dispute, they might well be telling the truth. In

that event the Kontnys had committed a fraud; and

tax fraud is criminal, though more often handled

on a civil than on a criminal basis.

 Furnas requested an interview with the Kontnys.

They agreed. At the interview he explained that

he was investigating allegations that they had

failed to withhold payroll taxes from overtime

payments to their employees. Before Mr. Kontny

arrived for the interview, Mrs. Kontny asked

Furnas whether she needed to have a lawyer

present for the interrogation. He replied that

this was "a civil exam" and it was up to her to

decide whether she needed to have a lawyer

present. But he added that if he discovered fraud

he would refer the matter for a criminal

investigation. He asked her for various business

records, which she gave him, and she made some

statements that were later used against her at

trial, for example that she realized that payroll

taxes have to be withheld from overtime wages. In

a follow-up phone call from Furnas a few days

later she mentioned that she had shredded some

checks that Furnas had inquired about. At the

mention of the shredded checks his suspicions

crystallized and he decided that he now had firm

indications that the Kontnys had committed tax

fraud and he turned the case over to the criminal

investigatory arm of the IRS and had no further

contact with the Kontnys.

 As an original matter it is extremely difficult

to see what possible basis there could be for a

motion to suppress in this case. Confessions or

other admissions obtained in the course of an

interrogation are deemed involuntary and

therefore inadmissible only if they are procured

by threats or promises. Bram v. United States,

168 U.S. 532, 542-43 (1897); Johnson v. Trigg, 28

F.3d 639, 641-42 (7th Cir. 1994); United States

v. Glover, 104 F.3d 1570, 1579 (10th Cir. 1997);

United States v. Guerrero, 847 F.2d 1363, 1366

(9th Cir. 1988). The Miranda rule is not in play

here since the interrogation of the Kontnys by

agent Furnas was not custodial. Beckwith v.

United States, 425 U.S. 341 (1976); compare

Mathis v. United States, 391 U.S. 1 (1968). But

the fact that the Kontnys were not in custody has
a broader significance. Virtually all cases

involving coerced confessions involve the

questioning of a suspect who is in police

custody, an inherently intimidating situation in

which people find it difficult to stand up for

their rights or even to think straight. The

situation is different when a person who does not

even know that he is a criminal suspect (that is

a premise of the Kontnys’ appeal) is being

interviewed in his home, and by a civil rather

than a criminal investigator to boot. Furnas was

unarmed, un-uniformed, unaccompanied. The Kontnys

were at no disadvantage in dealing with him. They

were under no pressure to answer his questions.

Any answers they gave were voluntary.

 Trickery, deceit, even impersonation do not

render a confession inadmissible, certainly in

noncustodial situations and usually in custodial

ones as well, unless government agents make

threats or promises. Frazier v. Cupp, 394 U.S.

731, 739 (1969); Holland v. McGinnis, 963 F.2d

1044, 1051 (7th Cir. 1992); United States v.

Rutledge, 900 F.2d 1127, 1131 (7th Cir. 1990)

("far from making the police a fiduciary of the

suspect, the law permits the police to pressure

and cajole, conceal material facts, and actively

mislead"); United States v. Byram, 145 F.3d 405,

408 (1st Cir. 1998) ("trickery is not

automatically coercion. Indeed, the police

commonly engage in such ruses as suggesting to a

suspect that a confederate has just confessed or

that police have or will secure physical evidence

against the suspect. While the line between ruse

and coercion is sometimes blurred, confessions

procured by deceits have been held voluntary in a

number of situations"). And these were custodial

cases. Nothing is more common in the noncustodial

setting of police investigations than for an

undercover police officer to extract a damaging

admission from a criminal suspect simply by

pretending to be another criminal. The admission

is usable in evidence against the suspect even

though he would never have spilled the beans to

the officer had he known the officer’s status.

Planting informers is not an unconstitutional

method of collecting evidence for use in criminal

trials. Illinois v. Perkins, 496 U.S. 292, 298-99

(1990); Hoffa v. United States, 385 U.S. 293,

303-04 (1966). There is no right to require

secrecy of the people whom one confides in.

 So even if Furnas was pretending to be

conducting a civil investigation but was really,

as the appeal argues, conducting a criminal one,

this would not, under the rules that govern the

admissibility of incriminating statements

(written or oral) made to government officers

even by a suspect who is in custody, make the

statements inadmissible. The circumstances did
not remotely prevent the Kontnys from making a

rational decision about whether to play ball with

Furnas. United States v. Lawal, 231 F.3d 1045,

1048 (7th Cir. 2000) ("a confession is voluntary

if the totality of the circumstances demonstrates

that it was the product of rational intellect and

not the result of physical abuse, psychological

intimidation, or deceptive interrogation tactics

calculated to overcome the defendant’s free

will"); United States v. Westbrook, 125 F.3d 996,

1006 (7th Cir. 1997) ("nothing in this record

leads us to believe the agents misled him or

exploited Mr. Westbrook’s anxiety to the point

that he was unable to make a rational decision

about whether to confess"); Sprosty v. Buchler,

79 F.3d 635, 647 (7th Cir. 1996) ("the police did

not magnify or exploit Sprosty’s fears, anxieties

and uncertainties to the point where he was

unable to make a rational decision about whether

to confess"); United States v. Doucette, 979 F.2d

1042, 1045 (5th Cir. 1992) ("a confession is

voluntary if, under the ’totality of the

circumstances,’ the statement is the product of

the accused’s ’free and rational choice’");

United States v. Velasquez, 885 F.2d 1076, 1089

(3d Cir. 1989) ("although the deception [by the

police] may have been a partial cause of

Velasquez’s statements, we do not think that her

will was overcome or her capacity for selfcontrol vitiated"); United States v. Guerrero,

supra, 847 F.2d at 1365 ("an inculpatory

statement is voluntary only when it is the

product of a rational intellect and a free

will"). We might have a more difficult case had

Furnas gone further and promised the Kontnys they

would not be prosecuted if they played ball with

him, for that conceivably is the kind of false

promise that might induce a rational person to

rely. United States v. Baldwin, 60 F.3d 363, 365

(7th Cir. 1995), vacated and remanded on other

grounds, 517 U.S. 1231 (1996); United States v.

Rutledge, supra, 900 F.2d at 1130. Furnas did not

do that. On the contrary, he as much as warned

the Kontnys that any evidence they provided of

fraud would lead to a criminal investigation. As

we have said, he didn’t have to go further and

give them Miranda warnings.

 It is true that the Internal Revenue Service by

regulation requires that a civil investigation

cease when the investigator develops firm

indications of fraud, Internal Revenue Manual

sec.sec. 4565.21(1), 9311.83(1), which the

Kontnys argued happened before the fatal

interview and the check-shredding phone

conversation. But the federal exclusionary rule,

which forbids the use of evidence obtained in

violation of the Fourth or Fifth Amendments, does

not extend to violations of statutes and

regulations. The Supreme Court so held in United
States v. Caceres, 440 U.S. 741, 755 (1979), with

specific reference to a regulation of the IRS.

See also United States v. Peters, 153 F.3d 445,

456 (7th Cir. 1998); United States v. Michaud,

860 F.2d 495, 498-99 (1st Cir. 1988); Groder v.

United States, 816 F.2d 139, 142 (4th Cir. 1987),

and, for application of the principle outside the

tax area, United States v. Chaparro-Alcantara,

226 F.3d 616, 621 (7th Cir. 2000); United States

v. Page, 2000 WL 1682523, at *3 (6th Cir. Nov. 9,

2000); United States v. Hinton, 222 F.3d 664,

674-75 (9th Cir. 2000); United States v. Felipe,

148 F.3d 101, 109 (2d Cir. 1998); United States

v. Hensel, 699 F.2d 18, 29-30 (1st Cir. 1983).

The Kontnys do not claim to have relied,

reasonably or unreasonably, on the existence of

the regulation that required Furnas to back off

as soon as he obtained firm indications of fraud.

United States v. Caceres, supra, 440 U.S. at 752-

53; United States v. Ani, 138 F.3d 390, 392 (9th

Cir. 1998); United States v. Pipes, 87 F.3d 840,

842 (6th Cir. 1996). But this means, as Pipes

makes clear, that there was no causal relation

between Furnas’s alleged violation of the

regulation and the Kontnys’ decision to make

incriminating statements. "The defendant

obviously did not know that the officers were

violating [the statute]. Thus, the officers’

failure to comply with [it] had no impact on

defendant’s decision to commit the offense." Id.

Nor is there any suggestion that Furnas violated

the prohibition against enforcement of a summons

for tax records after a matter has been referred

to the Justice Department for possible criminal

prosecution. 26 U.S.C. sec. 7602(c)(1); United

States v. Michaud, 907 F.2d 750 (7th Cir. 1990)

(en banc).

 A number of decisions explore at length the

nebulous distinction in the IRS regulation

between "first" and "firm" indications of fraud;

Furnas only admitted that he had the former sort

before he interviewed the Kontnys. But the cases

generally and we think rightly do not treat the

distinction as an independent basis for

determining whether evidence obtained in an IRS

investigation is admissible. They treat it merely

as a factor to be considered in evaluating the

defendant’s constitutional claim. The defendant

must prove that "the IRS’s conduct resulted in

prejudice to defendant’s constitutional rights."

United States v. Peters, supra, 153 F.3d at 452

n.10; see also United States v. Grunewald, 987

F.2d 531, 534 (8th Cir. 1993); United States v.

Knight, 898 F.3d 436, 438 (5th Cir. 1990), and

the concurring opinion in Peters, 153 F.3d at

462-64.

 There are some outliers, such as United States

v. McKee, 192 F.3d 535, 541 (6th Cir. 1999),
which states (in dicta, as the concurring judge

pointed out, id. at 545), reflecting a common but

perhaps excessive hostility to the Internal

Revenue Service, that section 4565.21(1) of the

IRS manual is "mandated by the Constitution." It

is true as we have noted that Caceres left the

door slightly ajar by indicating that it might be

a denial of due process to induce reasonable

reliance on the regulation and then pull the rug

out from under the defendant; but nothing of that

kind is involved in this case. United States v.

Tweel, 550 F.2d 297, 299 (5th Cir. 1977),

contains broad McKee-like language, and has been

cited frequently. But besides having been decided

before Caceres, it was a case, unlike ours,

involving the issue of consent to a search, and

the defendant in giving his consent was held to

have relied reasonably on the agent’s promise

that the investigation was purely civil. United

States v. Powell, 835 F.2d 1095, 1098 (5th Cir.

1988). The government had broken its promise, and

we know that admissions extracted by false

promises are sometimes excluded as being

involuntary. There were no promises in the

present case.

 Peters goes on to state that the defendant must

show "affirmative misrepresentations,"

"affirmative deceit," or "affirmative misleading"

(153 F.3d at 456-57) (these terms are

synonymous), but it would be a mistake to infer

that such a showing without more requires

exclusion of incriminating statements. Proof of

deceit must be linked up to the constitutional

standard of threat or promise. Deceit by itself

is neither, though it can be the basis of either-

-if Furnas had pretended to be a representative

of the Mob and told the Kontnys that they would

be killed if they didn’t turn over their business

records to him, or pretended to be an Assistant

U.S. Attorney and assured them they would not be

prosecuted if they cooperated with him, the

Kontnys might have a sound ground for exclusion.

Cf. Arizona v. Fulminante, 499 U.S. 279, 287-88

(1991). They showed nothing of the sort, and must

therefore lose even if the district court clearly

erred (the applicable standard of appellate

review, United States v. Peters, supra, 153 F.3d

at 459; United States v. McKee, supra, 192 F.3d

at 543; United States v. Wadena, 152 F.3d 831,

851 (8th Cir. 1998))--which, incidentally, it did

not--in finding that Furnas had firm indications

of fraud before he interviewed the Kontnys. That

issue is not determinative. A failure to

terminate a civil investigation when the revenue

agent has obtained firm indications of fraud does

not without more establish the inadmissibility of

evidence obtained by him in continuing to pursue

the investigation. There is nothing more here.
 Moving to the sentencing issue, we confront the

argument that the efforts the Kontnys made to

conceal their scheme of tax evasion did not

amount to the "sophisticated concealment" that

requires a two-level sentencing bonus under

U.S.S.G. sec. 2T1.4(b)(2). That they did make

such efforts is not in question. They wrote

separate checks to the employees, one for regular

wages and one for overtime, and sometimes the

overtime checks would include reimbursement for

expense items to disguise the fact that the

checks were for wages. The Kontnys programmed

their computer so that the amount of the overtime

checks was classified in nonwage expense

categories. The stubs for the overtime checks,

which they gave their accountant, likewise placed

the expense in nonwage categories.

 But did these efforts amount to "sophisticated

concealment"? They were not very sophisticated in

the lay sense of the word, especially in context.

By creating a fraud that involved the knowing

participation of more than two dozen employees,

they not only armed the employees to blackmail

them but greatly increased the risk of eventual

detection, though it is true that the fraud

persisted for at least a decade before the

inevitable occurred. The Kontnys’ efforts at

concealment were sophisticated in relation to a

case in which the owner of a shop evades taxes by

emptying the drawer of the cash register before

counting the day’s cash receipts and puts the

cash thus skimmed into a shoebox and slides it

under his bed, but unsophisticated in relation to

a scheme of evasion that does not depend on the

continuing goodwill of one’s entire workforce and

that creates a paper trail that is more difficult

to follow to its guilty conclusion than the one

the Kontnys created.

 The existence of a statutory sentencing range

reflects the fact that criminal acts that involve

the same statutory elements (in the case of

criminal tax fraud they are essentially that the

defendant knowingly made a materially false

return, 26 U.S.C. sec. 7206(1); United States v.

Pirro, 212 F.3d 86, 89 (2d Cir. 2000)) may differ

in circumstances that are pertinent to the

appropriate penalty. One criminal act may be much

more lucrative for the offender because it

involves a very large amount of money relative to

the cost of committing the offense, and so a

heavier punishment will be necessary to deter.

Another may be more lucrative than the average

not because it involves a larger take but because

the probability of detection is lower; an

economist would say in such a case that the

"expected" profit of the crime was greater. The

existence of a sentencing range as opposed to a

sentencing point allows these differences to be
reflected in sentencing. The federal sentencing

guidelines guide and discipline the judge’s

choice of the sentence within the range. They do

this by fixing a sentencing range (narrower than

the statutory range) for the average offense

within the offense category (here, criminal tax

fraud) and by prescribing bonuses and discounts

to adjust for relevant differences between the

average and the particular offender’s offense.

 The more sophisticated the efforts that an

offender employs to conceal his offense, the less

likely he is to be detected, and so he should be

given a heavier sentence to maintain the same

expected punishment, and hence the same

deterrence, that confronts the average offender.

Implementation of this rule requires both

determining how much the average offense is

concealed and relating the guideline concept of

"sophistication" to deterrent needs. The

complication in the first half of this inquiry is

that fraud is by nature self-concealing--its

success depends on its being hidden from the

victim. The average criminal tax fraud thus

involves some concealment; "sophisticated" tax

fraud must require more. A parallel distinction

has arisen in determining when statutes of

limitations in fraud cases are tolled. If

concealment were enough to toll such a statute of

limitations, the statute would be tolled in

almost every case, because fraud is inherently

covert. So the courts distinguish between the

initial fraud and any distinct efforts at cover

up ("fraudulent concealment") and toll the

statute only when the defendant has resorted to

such efforts. Wolin v. Smith Barney Inc., 83 F.3d

847, 851 (7th Cir. 1996); Martin v. Consultants &

Administrators, Inc., 966 F.2d 1078, 1093-95 (7th

Cir. 1992). Likewise the concealment that is

inherent in criminal tax fraud, as in our shoebox

example, must be distinguished from efforts over

and above that concealment to prevent detection.

Only the latter permit the sentencing

enhancement.

 In light of its purpose and context, we think

"sophistication" must refer not to the elegance,

the "class," the "style" of the defrauder--the

degree to which he approximates Cary Grant--but

to the presence of efforts at concealment that go

beyond (not necessarily far beyond, for it is

only a two-level enhancement that is at issue,

which in this case added roughly six months to

the defendants’ sentences) the concealment

inherent in tax fraud. It is true that the

guideline commentary illustrates with examples

suggesting a higher level of financial

sophistication: "’sophisticated concealment’

means especially complex or especially intricate

offense conduct in which deliberate steps are
taken to make the offense, or its extent,

difficult to detect. Conduct such as hiding

assets or transactions, or both, through the use

of fictitious entities, corporate shells, or

offshore bank accounts ordinarily indicates

sophisticated concealment." U.S.S.G. sec. 2T1.4,

Application Note 3. But these are offered as

examples, as emphasized in United States v.

Friend, 104 F.3d 127, 130 (7th Cir. 1997), and

United States v. Clements, 73 F.3d 1330, 1340

(5th Cir. 1996); the essence of the definition is

merely "deliberate steps taken to make the

offense . . . difficult to detect." When the term

"sophisticated" is defined so, it becomes

apparent that the district judge did not commit a

clear error (the applicable standard of appellate

review of this ruling too, e.g., United States v.

Madoch, 108 F.3d 761, 765 (7th Cir. 1997); United

States v. Aragbaye, No. 99-50603, 2000 WL 1818365

at *6 (9th Cir. Dec. 13, 2000)) in enhancing the

defendants’ sentences.

 The Kontnys point out that the government rarely

prosecutes criminal tax fraud that is not

"sophisticated" in the sense indicated by the

facts of this case. Armed as it is with fearsome

civil remedies involving huge penalties--for

example the 75 percent penalty for taxes

fraudulently not paid, 26 U.S.C. sec. 6663--the

government brings few criminal tax cases (fewer

than 700 a year) relative to the amount of tax

fraud; and perhaps none against defendants less

sophisticated than the Kontnys. We do not know

this to be the case, but will assume it is for

the sake of argument. No matter. The question is

what the Sentencing Commission took to be the

average criminal tax fraud when it promulgated

the "sophisticated concealment" guideline back in

1987. That would be the benchmark for courts to

use to decide whether the Commission would have

wanted the sentences of the Kontnys increased by

reason of the character or extent of their

efforts at concealment. The government’s lawyer

told us without contradiction from his opponent

that before the guidelines era the federal

government prosecuted many unsophisticated

criminal tax frauds, as illustrated by our

shoebox case. The defendant would usually plead

guilty and the judge impose a light sentence

("roughly half of all tax evaders were sentenced

to probation without imprisonment, while the

other half received sentences that required them

to serve an average prison term of twelve

months," U.S.S.C. sec. 2T1.1, Background

Commentary), and sentences in those days were

essentially unappealable unless they exceeded the

statutory maximum. So these were easy cases for

the government. When the guidelines came into

force, limiting sentencing discretion, the

government shifted its focus to the more serious
cases, not wanting to become involved in trials

of minor cases when under the guidelines

defendants might be reluctant to plead guilty

because they would be facing a heavier sentence

and might, like so many other federal criminal

defendants these days, appeal their sentences. So

today the average criminal tax fraud that is

prosecuted is more sophisticated than when the

concept of sophistication was introduced into the

guidelines. That is no reason for thinking the

Commission would consider the enhancement imposed

in this or like cases excessive even if they are

the only type of criminal tax fraud being

prosecuted nowadays.

Affirmed.