The Honor able Solomo n Ol i ver, Jr., Chief United States District J udg e for the Northe rn * District of Ohio, sitting by desig nation. NO T R EC OM M EN DE D F OR F UL L- TEX T P UB LIC AT ION F ile Nam e: 10a0723n.06 No. 08-2605 UN ITED STA TES C OU RT OF AP P EA LS F OR THE SI XT H C IR CU IT
UNI TED STATES OF AMERI CA, Plaintiff-Appellee , v. CH AR L ES L EE ED KI

NS, De fe nd ant- Ap pe lla

nt. )

) ) ) ) ) ) ) ) ON APPEALFROM THE U NI TED STATES DI ST R I CT COURT FOR THE WES TERN DI STRI CT OF MI CHI GAN

Be fore : GI L MAN and COOK , Circuit J udg es; OL I VER, Chief District J udg e. * COOK, Circuit J udg e. Charle s L ee Edkins pleade d g uilty to four counts of t ax evasion for fa ili ngto t ime ly

fi le his ta x re tur

ns fo r m ult ipl e y e ars and

fo r u nd e rr e po rt ing hi s in com e on tho se returns he did file. The district cour t sentence d him to 48 mont hs’ imprisonment, three y ear s of supervised r elea se, and $285,711 in restitution. Edkins appea led, claiming t he st atute of lim itations barr ed his prosec ution and challeng ing his a dvisory g uidelines ca lculation and the r estitution order. We a ff ir m Ed kin s’ s c on vic tio n a

nd se nte nc e e xce pt w ithre sp e c t to the a bu se -o f- a -p os iti on -o f- tr

us t enhanc ement and the district court’s orde r of r estitution.No. 08-2605

United States v. Edk

ins

- 2 - I. Charles Edkins’s tax evasion closely relates to his ownership of B aby Bliss, I n c. (“ Ba

by B lis s” ), a de c a de s- old

c omp any that ma nu fa c tur e d c hil dr e n’ s clo thi ng . Ed kin s pur c ha se d a

n in te re st in B aby Bliss in 1983 and beca me its sole share holder in 1990. Edkins’s failure to file persona l tax
re tur ns fo r 1 99 5 thro ug h 1 99 8 caus ed th e I RS to sc rutin ize his ta x lia bil ity , w hic h in c lud e d h is pe rs on a l us e of

B a by B lis s c or

po rate fu nd s. Th a t sc rutiny

pr omp te d th e I RS to la

un c h f ir st a n a ud it and then a

criminal tax investigation. This investigation unveiled that Edkins—who eventua lly filed returns for 1995, 1996, and 19 97 —h a d und e rr e po rt e d h is p e rs on a l ta x lia bil ity , f a ile d to fi le c or

po rate ta x r e tur

ns fo r B a by B lis s for f iscal yea rs 1 9 9 6 t h ro u gh 2 0 0 0 , an d em p l o y edq

u es t i o n ab l e a cc o u n t i n g p ra ct i ce s i nco mp ensating Ba by Bliss employ ees. B et we en 1 9 9 5 and 1998, nea rly $979,000 was tra

nsfer red f rom company bank ac counts to Edkins’s persona l ba nk acc ounts, of which $335,500 wa s transfe rre d back to B aby B lis s b ank

a c c ounts . Usi ng th ese fu nd s, Ed kin s p ur c ha se d tw o h ome s, a Cor ve tte , a nd a L inc oln T o wn C ar . Ba s edi np ar to nt h es e t ra n s fe rs , t h e IRS co n cl u d edt h at E d k i n s fa i l edt o re p o rt a l ar ge po rt ion of his inc ome fo r the y e ars 19 95 thr ou g h 1 99 8 a nd ow e d $ 24 5, 93 0 in

un pa id p e rs on a l ta xes. The I RS further ca lculated that, f or fa iling to file B aby

Bliss corpor ate tax returns for fiscal y ear s 1996 throug h 2000—a period during which the I RS dete rmined Ba by Bliss had g ross sales of ove r $2 .5 mil lio n— Ed

kin s o we d $ 31 ,1 35 in t a xes. Th e I RS a lso fa ult e d E dk ins fo r fa ili ng to w ith ho ld pay roll tax es, treating his employ ees as both subcontra cted labor and ac tual employ ees dur ing theNo. 08-2605

United States v. Edk

ins

- 3 - same y ear , and pay

ing c ash bonuses. Ac cordingto the g overnme nt, these practice s—which led B aby B lis s e mpl oy e e s to fi le in corre c t in div idu a l ta x re tur ns —r e su lte d in

B a by B lis s und e rr e po rt ingits pa y ro ll F I CA ta x lia

bil ity by $8 ,6 46
. Co mb in ingthe $2 45 ,9 30 in p e rs on a l ta xes, $3 1, 13 5 in corpor ate tax es , and $8,646 in pay roll FI CA tax es owe d, the I RS calculated a total tax loss of $285,711.
After this investigation, an I RS age nt and an Assistant U.S. Attorney informed Edkins that they planned to see k an indictment ag ainst him. Edkins’s attor n ey en gaged in plea ag ree ment disc u s s i o n s wi t h the g overnme nt. Be fore rea ching a re solution, however, Edkins lef t the United States and moved to the Ba h am as , transfe rring$380,000 from his Michig an bank a ccounts to a Ba hamian branc h of a Swiss bank. The g overnme nt issued an indictment and wa rra nt for Edkins’s
arr e st. Af te r b e ingde po rt e d by the Roy a l Ba hama s Polic e F or c e , Edk ins ple a de d guil ty (w ith ou t a plea a g ree ment in place) to evading persona l income taxes for c alenda r y ear s 1995, 1996, 1997, and 1998. The P robation De partment issued a prese ntence repor

t (PSR ) with a guidelines rang e of 30–37 months’ imprisonment, based in part on the calculated tax loss ($285,711). Edkins objected to the tax-loss calc ulation as well as the a pplication of the sophisticated- conce alment and a buse-of-apo sit ion -o f- tr

us t e nh anc e me nts
. Af te r h e ari ngte sti mony

fr om E dk ins and

tw o I RS a g e nts , th e dis tr ic t c ourt fo un d E dk ins to la c k c re dib ili ty , a do pte d th e fa c tua l fi nd ing s in the PSR, ov e rr ule d Ed kin s’ s ob je c tio ns to t

he PSR, and denie d Edkins the PSR -re commended r eduction for acc eptanc e of r esponsibility . The c ourtNo. 08-2605

United States v. Edk

ins

- 4 - recal cul ated E dk ins ’s g uid e lin e s r ang e a s 4 1– 51 months . I t th e n s e nte nc e d h im t o 4 8 mo nth s’ imp ri so nme nt f

oll ow e d b y thr e e y e ars of su pe rv ise d re le a se and or de re d Edk ins to p ay $2 85 ,7 11 in restitution. Wit h the ex ception of $66,000 in chec ks that the gover nment had seized fr om Edkins in the Ba hamas, whic h the cour

t ordere d h i m t o endorse at sentenc ing, E dkins has not paid the
rema ining r estitution.
II.
We f ir st c on sid e r E dk ins ’s a ff

ir ma tiv e de fe ns e that th e statut e of lim itatio ns ha s e xpir e d s o
a s to ba r h is p ro se c uti on . H e g ro un ds thi s ti me lin e ss c ha lle ng e on the d a te of

of fe ns e completion—April 15, 1999—listed in both the P SR and the Amended Judgment issued in his case
. He c ounts fr om t

hat date to a

rgue that th e g ov e rnme nt’ s in dic tme nt i s su e d b e y on d th e six- y e ar s ta tut e of limitations for tax evasion. See 26 U.S.C. § 6531. The tax-evasion statute of limitations begins to run on the date of the last “a ffirmative act of evasion.” United States v. Dandy , 998 F.2d 1344, 13 55 (6 th Cir
. 19 93 ). Th e statut e e xclu de s f ro m th e c a lc ulatio n ti me duri ng wh ic h th e de fe nd a nt “ is outside the United States” or “a fug itive f rom justice.” 26 U.S.C. § 6531. The g overnme nt issued the ind ic tme nt a g a ins t E dk ins on June 14 , 2 00 5. Ed

kin s’ s c la im fa ils e ve n if we a c c e pt t hat th e la st aff irmative ac t of eva sion occurr ed on Apr il 15, 1999. Edkins moved to the Bahama s on Marc h 25, 2005—befor e the statute of limit ations w o u ld

h a v e e xp ir ed—and r emained the re until the indictment issued. As authorized by 26 U.S.C. § 6531, the court excludes this tim e outside t he countr y from the statute-of

-limitations calculation, rende ring the indictment timely
.No. 08-2605

United States v. Edk

ins

- 5 - III
. Ed kin s c ha lle ng e s th e c a lc ulatio n of his a dv iso ry g uid e lin e s rang e on a nu mbe r o f g ro un ds , inc lud ingthe fo llo wi ng : ( a ) am ount of ta x los s; (b ) ap pli c a tio n of t he a c c e pta

nc e -o f- re sp on sib ili ty reduc tion; (c ) application of the sophisticated-c oncea lment e nhance ment; and (d) a pplication of the abuse- of-a -position-of-trust enha nceme nt. We r eview a

district court’s finding s of fa ct re lated to the applicat i o n o f t h e advisory SentencingGuidelines for clea r er ror, a nd a district cour

t’s leg al conclusions i nterpre ting the guide lines de novo. United States v. Tatum , 518 F.3d 369, 372 ( 6th Cir. 2008).
A. Ta x L os s
Af te r h e ari ngte sti mon

y fr om t wo I RS a g e nts and

Ed kin s, the dis tr ic t c ourt

a do pte d the PSR tax-loss calc ulation of $285,711. Edkins argues that total tax l oss should be $112,777 and that the district court’s miscalc ulation stemmed from (1) treating “loans” from Ba by Bliss to the defe ndant as income; (2) applying the wrong tax rate for 1998; a nd (3) including ta x es owe d by the def endant’ s corpor ation.
1. L oa

ns vs . Inc ome
Edkins first contends that the court misconstrued the $290,000 that he withdrew f rom Ba by Bliss to purcha se two homes as inc ome when it should have viewed the wi t h d ra wa l s as l oans for $1 10 ,0 00 and

$1 80 ,0 00 . T re a tin g the wi thd ra wa ls a s loa ns rat her

tha n in c ome , a s E dk ins ur g e s,No. 08-2605

United States v. Edk

ins

- 6 - wo uld de c re a se the tot a l ta x loss a ttr ib ut ed to him , w hic h in tur n w ou ld d e c re a se Ed

kin s’ s b a se offe nse leve l. I n deter

mining whe ther a

withdrawa l from a business c onstitut es a loa n, “the intention of the pa rties” c ontrols the analy sis. Berthold v. Comm’r , 404 F.2d 119, 122 ( 6th Cir. 1968). The parties must have “an actual int ent t hat m oney advanc ed will be re paid.” Id . This court consider s the taxpay er’ s testimony

that he intended to r epay the money in que stion, but, espec ially when the alleg ed cr editor and de btor are rea lly one and the s am e, “such se lf-ser ving te stimony

‘ca n appropr iately

be viewe d with some dif fi d ence unless supported by other fa cts which bringthe transac tion much c loser to a nor mal arms-le ng th loan.’” Jaques v . Comm’r , 9 35 F .2 d 1 04 , 1 07 (6 th C i r. 1 9 9 1 ) ( qu o t i n g Be rth old , 404 F.2d at 122). Objective fac tors to c onsider includ e “ [ n ] ormal [s] ecur ity , interest and r epay ment arr ang ements (or

eff orts to secur e same ).” Be rth old , 404 F.2d at 12 2. I n c on tr a st, a wi thd

ra wa l con sti tut e s inc ome wh e n “‘ its re c ipi e nt ha s suc h c on tr ol o ve r i t th a t, as a pr actica l matter, he derive s rea dily rea liz able economic value from it.’” Un ite d S tat es v . Cu rti

s , 7 8 2 F. 2 d 5 9 3 , 5 9 5 (6 t h C i r. 1 9 8 6 ) ( qu o t i n g Davis v. U nited States , 22 6 F. 2 d 3 31, 334 (6th Cir. 1955)). We re view the district cour t’s decision to treat the mon ey as i n co m e for clear err or. See Jaques , 935 F.2d at 107. Although E dkins testified that he alwa y s intended to repa

y the loans upon the sale of the homes, [R . 58, Nov. 20, 2008 Hr’ g Tr. 102, 131], the district c o urt expli citly found Edkins’s testimony not cre dible, [R . 57, Dec . 15, 2008 Hr’gTr. 6–7, 10]. Moreove r, bec ause the cre ditor and de bto r h e re are re a lly on e and the same , this c ourt vie ws Ed kin s’ s te sti mony

wi th m or e sk e pti c ism unless other objective fac tors bring this case c loser to a nor mal arms-le ng th transac tion. See J aques ,No. 08-2605

United States v. Edk

ins

- 7 - 935 F.2d at 107. Edkins points to suc h objective f actor s as his memorialization of the “loan” in two promissory notes, transfe r of the mortg ag e to B aby Bliss, repa y ment of all but $15,000 of the money afte r the sale of the homes, a nd decla ration of the unpaid int ere st as income on his 1996 and 1997 ta x re tur ns . Edkins’s use of the pr omissory notes ex ec u t ed betwee n Ba by Bliss and C.L .E., I nc. (a
c or po ratio n E dk ins c re a te d th a t ha d n o i nco me or e xpe ns e s) , und e rc uts rathe r t ha n s up po rt s h is argument. First, Edkins beg an transferr ing money from Baby Bliss to his persona l acc ount in 1995, but signe d the promi ssory notes many months later, in April 1996 and August 1997. This time ga p “militates ag ainst assig ning much weig ht” to the promissory notes. Patrick v. Comm ’r , 7 5 T .C. M. (CCH) 1629, 1633 (1998), aff’d , No. 98-1487, 1999 WL 282613 (6th Cir. A pr. 30, 1999). Second, though the promissory

notes specif

ied a monthly

pay ment schedule , by

interlineation Edkins edited the notes’ ter

ms to allow him t o waive a ny pay ment defa ult. Fur thermore , the form notes lac ked a deadline f or full re pay

ment and require d no secur ity , undermining the leg itimacy of his stance
. See Dietrick v . Comm’r , 881 F.2 d 336, 34 0 ( 6th Cir . 1 98 9) ; Bergerse n v. Comm’r , 70 T.C.M. (CCH) 568, 586 (1995), aff’d , 109 F.3d 56 ( 1st Cir. 1997).
Ed kin s’ s a sse rt ion

that he re pa id the fu

nd s to B a by B lis s sim ila

rl y fa ils to su

pp or t hi s c la im. Acc ording to the PSR , afte r re viewing bank rec ords and other information, an I RS age nt determined that E dk ins mad e it loo k a s th ou g h h e re tur ne d th e fu

nd s to B a by B lis s w he n h e ha d n ot a c tua lly do ne so . [PSR ¶

35 ]. Ev e n if Ed

kin s did tr ans fe r the fu

nd s fr om the sa le of

the ho me s to B a

by B lis s,No. 08-2605

United States v. Edk

ins

- 8 - the manner

in which he c ontends he did d em o n s t ra t es he lacked “ an ac tual intent that money advanc ed [would] be re paid.” Be rth old , 404 F.2d at 122. Wit h respe ct to the $110,000 alleg ed loan, Ed kin s c la ims he re c e ive d $ 95 ,4 23 .3 0 u po n s a le and

re tur ne d o nly thi s amou

nt t o B a by B lis s. With respe ct to the $180,000 loan, he sold the proper ty for $232,268.60 a

nd supposedly

returne d $180,000 of that to Ba

by Bliss. Edkins c laimed that he would repor t the approximately

$15,000 shortfall as income on his 2000 tax returns, but he neve r filed these returns. These re cords, e ven take n at fa ce
va lue , s ug g e st that E dk ins ha d s uc h c on tr ol o ve r t he mon e y that he “‘de ri ve [d] r e a dil y re a liza ble economic va lue from it.’” Se e Cur tis , 7 8 2 F. 2 d at 5 9 5 (q u o t i n g Da v is , 226 F.2d at 334). Edkins, moreover , admitted that he purc hased the proper ty in question for his own use. H e bo rr ow e d the ho me -p ur c ha se fu nd s f ro m B a by B lis s, and

arr ang e d th e tr ans a c tio n s o th a t he c ou ld forg o making the loan pay ments. This a

rra ng ement prec isely matches the situation this co u rt
c a u ti o n e d a g a in s t w h e ne xp la in in g th a t, w it h o u t e v id e n c e o f

th e ty p ic a l c o r p o r a te f o r ma li ti es
acc ompanying a

loan, “a sole owner

of a c orporation could have his pe rsonal expenses paid by the corpor ation as a loa

n and postpone re pay

ment indefinitely , thus escapingthe double taxation which is n o r ma ll y in c id e n t t o th e c orpora te form.” Jaques , 935 F.2d at 109. I n light of a ll the other
e vid e nc e , w e are un persua de d b y Ed kin s’ s c on te nti on

that, b e c a

us e he pr ov ide d B a

by B lis s w ith mortg ag e dee ds to the proper ties and re ported unpa id loan interest as inc om e, the dist rict cour t clea rly err ed in treating the loa

ned funds a s income.No. 08-2605

United States v. Edk

ins

- 9 - 2. Ta x Rat e
Edkins next claims that the district c ourt incorre ctly calc ulated the total tax loss wit h respe ct to his unfiled 1998 tax return by acc epting the I RS’s calculation rather than a pply ing a 20% tax rate. Where a n offe nse involves a f

ailure to file a

tax return, “the tax loss shall be trea ted as e qual to 20% of the g ross income . . . unless a more a ccur ate deter

mination of the tax loss c an be ma de.” U .S.S.G. § 2T1.1(c) (2)( A). “ These pr esumptions apply unless the par

ties provide sufficient information for
a more acc urate assessment of tax loss.” Un ite d S tat es v . H arris , 200 F. App’ x 472, 495 (6th Cir. 2006) (c iting U.S.S.G. § 2T1.1(c) (2)( A) c mt. n.1). The g overnme nt calculated Edkins’s tax rate by examining Edkins’s and B aby Bliss’s banking rec ords, includi n g records of tra nsfer s from B aby

Bliss’s ac counts to Edkins’s persona l
a c c ounts , a

nd the n a pp lyingsta

nd ard a dju stm e nts and

the sta nd ard ta x ra te . E dk ins ob

je c ts, maintaining that the 1998 tax l oss c annot be ac curately deter mined “bec ause in 1998 ther e we re no
rec ords by

which to compute a ll of the deduc tio n s , ex em p t i o ns, and cr edits to which he wa s entitled.”
Edkins stil l has not filed a tax return for 1998, nor does he identify any specific deduction, exemption, or credit that the g overnme nt failed to apply . The fa ct that Edkins (had he filed a r eturn) may have taken adva

ntag e of a dditional deductions, ex em p t i o n s , or cr edits does not preve nt the g overnme nt’s calc ulation—using ba nk rec ords, standar d deductions, and a sta ndard ta x rate —from b e in g “ mo r e a c c u r a te ” th an a p p li c a ti o n o f a f

lat r a te to E d k in s ’ s g r o s s in c o me . S ee Uni ted StatesNo. 08-2605

United States v. Edk

ins

- 10 - v. De lfino , 510 F.3d 468, 473 ( 4th Cir. 2007) (explaining that the law does not require the district court to spe culate a s to what deduc tions the defenda nt may have be en entitled to had he completed his tax returns) . The district cour t did n o t cl ear ly

err in sanctioning this method of calculating Edkins’s 1998 tax l iability
. 3. Unpaid Corporate Taxes
F ina lly , E dk ins c ha lle ng e s the inc lus ion of $3 1, 13 5 in

ta xes a lle g e dly

ow e d b y B a by B lis s for tax y ear s 1999–2000 on the g rounds that his g uilty plea e ncompassed ta x violations only for the y ear s 1995–1998. Commentary to U.S.S.G. § 2T1.1, howeve r, provides that, in determining the tax loss attributable to the offense, “all conduct violating t he tax laws shoul d be considered as part of the same c ourse of co n d u ct o r common sche me or plan unle ss the evidenc e demonstrates that the conduct is cle arly

unrelated.” U.S.S .G. § 2T1.1 cmt. n.2. This court ha s held that “‘a ll conduct violating the ta x laws’ must re fer to a ll r eleva nt c riminal conduct underly ing the char g ed off

ense,” United States v. Danie l , 9 5 6 F
. 2 d 5 4 0 , 5 4 4 ( 6 th Ci r . 1 9 9 2 ) ( e mp h a s is o mi tt e d ) , an d tha t the g uidelines permit “the use of tax loss resulting from uncha rg ed [criminal] conduct” in ca lculating t o t al t ax los s, United States v. Pierc e , 1 7 F
. 3 d 1 4 6 , 1 5 0 ( 6 t h C i r . 1 9 9 4 )
. E d k i n s ’ s f a i lur e to f

ile corpor ate tax returns for

Ba by Bliss in 1999 and 2000 qualifies as such rele vant, uncha rg ed cr iminal
c on du c t. Ac c or din g ly , the dis tr ic t c ourt did no t c le a rl y e rr by inc lud ing the se fu nd s in the ta x-lo ss calc ulation.No. 08-2605

United States v. Edk

ins

- 11 - B
. Ac c e pta

nc e of Re sp on sib ili ty
Ed ki ns mai nt ain s t hat he s ho ul d rec eiv e th e P S R- reco mm end ed acc ept ance- of- res pons ibi lit y reduc tion for the following rea sons: he pleade d g uilty to fou r co u nts of the indictment befor e the first pretr ial confe renc e; admitted to evadingincome taxes for c alenda r y ear s 1995–1998 at his plea hear ing a nd his se ntencing hear ing; and answe red questions at his sentenc ing hear ing reg ardingthe
a mou nt o f t a xes o we d, the mon e y take n f ro m B a by B lis s to buy

re a l e state , h is m ov e to t

he B ahama s, and his deposit of funds in a Swiss bank a cc o u n t
. T he g uidelines permit an a cce ptance -ofresponsibility

reduc tion upon consideration of f act o r s in c lu d in g

th e d e f e n d a nt’ s “truthfully

admitting the conduc t comprising the offense(s) of conviction, and truthfully admitting or not falsely denying any additional rele vant conduct for which the defe ndant is a ccounta ble” and “the timeliness of the defe ndant’s conduc t in manifesting the acc eptanc e of r esponsibility .” U.S.S.G. § 3E1.1 cmt. n.1. An “ove rall def

ere ntial scope of r eview” steers § 3E1.1 de terminations beca use they “involve an
overa ll lega l decision that is fac t-bound, the district court ha s comparatively g reat expertise, and the value of uniform court of appe als prec edent is limited.” United States v. Bolden , 479 F.3d 455, 464 (6th Cir. 2007).
Se ve ra l ne g a tiv e c re dib ili ty a sse ssm e nts dr ov e the dis tr ic t c ourt to re je c t th e PSRrec ommended re duction. See Dec . 15 2008 Hr’gTr. 6–7, 10. No error results bec ause a defe ndant may proper ly be denied such a r eduction “‘ if the cour t believes the de fenda

nt testified untruthfully ,’”No. 08-2605

United States v. Edk

ins

The guidelines now re fer

to this enhance ment as “sophisticate d means.” 1 - 12 - as the district cour

t found here
. See U

nited States v. Lay , 583 F.3d 436, 448 ( 6th Cir. 2009) (quoting United States v. Bonds , 48 F.3d 184, 189 ( 6th Cir. 1995)).
C. Sophist icated Conc ealment
Edkins next challeng es his sophisticate d-conc ealment enhanc ement. The guidelines define 1

“ so ph ist ic a te d c on c e a lme nt” a s “ c omp le x o r e sp e c ia lly int ri c a te of fe ns e c on du c t in

wh ic h d e lib e rate ste ps are take n to make the of fe ns e , o r i ts e xten t, d if

fi c ult to d e te c t.” U. S.S. G. § 2 T1 .1 (b )( 2) c mt.
n. 4. “ Con du c t su c h a s h idi nga sse ts or tr ans a c tio ns , o r b oth , thro ug h th e us e of fi c tit iou s e nti tie s, corpor ate she lls, or offshore financ ial acc ounts ordinarily indicates sophisticated c oncea lment.” Id
. A cour t may g round its finding of

sophisticated conc ealment on a series of actions as a

whole, eve n if the ac tions indi vidually

do not demonstrate sophistication. United States v. Tandon , 111 F.3d 482, 491 (6th Cir. 1997).
Acc ording to the PSR

—which the dist rict court endorse d—Edkins eng ag ed in sophisticated
conce alment by

using a fictitious entity

or shell cor

poration; structuringfinanc ial transac tions for the purpose of

evadingcurr ency -transa ction repor ting r equire ments; creating f ictitious l oan documents to purcha se one or more re sid en ce s ; using a n offshore bank ac count; falsifying employ ees’ 1099 forms and by passing the company ’s pay roll acc ount in favor of

the g ener al bankNo. 08-2605

United States v. Edk

ins

- 13 - acc ount in pay ing e mploy ees; a nd attempting to hide persona l inc ome and funds taken f rom Ba by Bliss throug h sham transa ctions. [P SR ¶ 63]
. Edkins’s conduct just i fi edt h e d i s t ri ct co u rt ’s ap p l i ca t i o no f t h i s en h an ce m en tb ecause Edkins eng ag ed in two prototy

pical examples of sophisticated c oncea lmen t

—u s i n g a cor porate shell and moving money

offshore
. See U. S.S. G. § 2T 1. 1( b) (2 ) c mt. n. 4. Suc h c on du c t pl a inl y e sta bli sh e s th a t, in contras t t o t h e t y

pical tax evader , Edkins did more than “simply lie[] on a 1040 for

m.” United States v. Clear , 112 F. App’x 4 2 9 , 431 (6th Cir. 2004) (interna l quotation marks and citation omi tte d) . Y e t E dk ins ma int a ins that th e se a c tio ns “ ha d n oth ing to do wi th h is e va sio n o f i nc ome taxes.” [Appellant Br. 27]. Reg ardle ss, the district court c ould properly consider c onduct re lated to Ed k in s ’ s tax e v a s io n in d e te r mi n in g w h e th e r to e n h an c e f o r s o p h is ti c a te d c o n c e a lm ent. See U.S
. S
. G. § 1B1.3( a)( 1) (e x plaining that courts should determine spe cific of fense char acte ristics based on “ all acts a

nd omissions committed, aided, abet t ed, counse led, commande d, induced, pr oc ur e d, or

wi llf ull y c a us e d by the de fe nd ant .
. . that oc c ur re d d ur ingthe c omm iss ion

of the of fe ns e of convic tion, in prepara

tion for t h at offe nse, or in the c ourse of attempting to avoid detection or responsibility

for that of

fense ”).
D. Ab us e of

a Pos iti on of Tr us t
Edkins next urg es that the district c ourt improperly applied an enhanc ement for abuse of a position of trust. The g uidelines call for a two-le vel incre ase w hen “the defe ndant abuse d a position of public or pri v at e trust, or used a spe cial skill, in a manner that significa ntly fac ilitated theNo. 08-2605

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- 14 - commission or concea lment of t he offense.” U.S.S.G. § 3B1.3. “ [T] he leve l of discre tion accor ded an employ ee is to be the decisive f actor in determining whether

h i s p o sition was one that ca n be char acte rized as a trust position.” United States v. May , 568 F.3d 597, 603 ( 6th Cir. 2009) (alter ation in orig inal) (inter

nal quotation marks and c itation omit ted). “The abuse- of-trust enha nceme nt may only be ap p li e d

w h e r e th e d e f

e n d an t a b u s e d a p o s it io no f

tr u s t w it h th e v ic ti m o f

h is c h arg ed conduct.” Un ite d S

tat es v . W hit e , 270 F.3d 356, 371 ( 6th Cir. 2001).
Th e dis tr ic t c ourt

a do pte d th e PSR’ s r e c ommende d a pp lic a tio n o f a

n a bu se -o f- tr us t enhanc ement bec ause Edkins pre sented himself a s a ce rtified public ac countant to his employ ees a nd implemented unusual ac counting prac tices at B aby Bliss, such as treating employ ees a s independe nt
con tr act ors fo r t

he fi rs t th re e mon ths of

the y e ar. Whe n e mpl oy e e s q ue sti on e d th e se pr a c tic e s, Ed kin s v ou c he d f

or the ir pr op ri e ty . F oc us ingon

the Sixth C ir c uit

re qu ir e me nt that an a

bu se -o f- tr us t enhanc ement may

be applied only

when the de fenda

nt abused a

position of trust with t he victim of the cha rg ed conduc t, Edkins corre ctly maintai n s t hat this enhanc ement does not fit and that the district court er

red in re ly ing upon his abuse of his positi on of trust with Ba by Bliss to justify

the enhanc ement. Se e id . J ust as in May , ano the r tax-e va sio n c a se , Ed kin s’ s c on du c t sh or

te d the I RS, rende ring it—not Baby

Bliss—the vi ctim of Edkins ’s t ax evasion. 568 F.3d at 603–04. Be cause tax laws oblig ed Edkins only “to collec t the money

and pass it along t o the g overnme nt”—a nond i s c r e t i o n ar

y d u t y s i m i l ar

t o t h a to f a b an k t e l l e r
— w e a g r e e w i t h E d k i n s t h a th e d i d n o to c c u p y a position of trust with t he I RS. See id. at 603.No. 08-2605

United States v. Edk

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- 15 - I V. Appar ently

focuse d on the s ignif

icant balance in Edkins’s Swiss bank acc ount, the district
cour t o r d e r e d E d k in s to p ay

$ 2 8 5 , 7 1 1 in

r e s ti tuti o n , w it

h $ 2 0 0 , 0 0 0 d

u e im me d iate ly

an d the
rema inder pa

y able dur ing E dkins’s peri o d o f supervised r elea se. Edkins cha lleng es the c ourt’s
a uth or ity to o rd e r r e sti tut ion

pa id i mme diate ly ra

the r tha n a s a c on dit ion of su pe rv ise d r e le a se . T his
c ourt re vie ws de no vo wh e the r t he law p e rm its a

re sti tut ion

or de r a nd , wh ere the law d oe s p e rm it such an or der, rev i ew s the amount of re stitut ion ordere d for a buse of discr etion. United States v. Johnson , 440 F.3d 832, 849 ( 6th Cir. 2006).
T h e d i s t ri ct court found that the I RS suffere d a compe nsable injury under the Victim and Witn e ss P ro te c tio n A c t ( VWPA ) a nd or de re d $ 28 5, 71 1 in

re sti tut io n, wi th $ 20 0, 00 0 p a y a ble immediately . [R . 57, Dec . 15, 2008 Hr’gTr. 50–51]. Under the VWPA, cour ts ma y order restitution by de fe nd ants c on vic te d und e r T itl e 18 or c e rt a in e nume rate d se c tio ns of Ti tle s 2 1 o r 4 9. 18 U. S.C. § 3663. Be cause Edkins pleaded gui l t y t o v i olating 26 U .S.C. § 7201—an offense to which the VWPA does not a

pply —the court lacke d authority to or der VWPA re stitut ion. See 18 U.S.C. § 3663 (e nume ratin g a

pp lic a ble of fe ns e s) ; United States v. Ande rson , 545 F.3d 1072, 1077 (D.C. Cir. 2008) (explaining that the V WP A does not authoriz e re stitut ion for violation of 26 U.S.C. § 7201), c e rt. denied , 1 29 S. Ct . 2 44 5 ( 20 09 ); United States v. Butler , 297 F.3d 505, 518 ( 6th Cir. 2002) (“[T]he VWPA does not apply

to Title 26 offense s such as tax evasion.”) . I n support of i t s d ec i s i o n, the district court cited United States v. Madison , 226 F. App’x 535 (6th Cir. 2007), a c ase upholding anNo. 08-2605

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Edkins a dditionally claims that the district court fa iled to adequately consider his medic al 2 condition and subsistence needs when order ing restitution. Although w e vac ate the r estitution order, we note that review ing the rec ord conf irms the district c ourt’s evaluation of Edkins’s testimony on this subject, rende ring this contention baseless. [ See R. 58, Nov. 20, 2008 Hr’g Tr. 115–17, R. 57, Dec . 15, 2008 Hr’gTr. 33–36]. - 16 - awa rd of r estitution ordered pur suant to the VWPA. I n Madison , though, the defe ndant cha lleng ed the re stitut ion awar d as excessive a nd unsupported by

the evidenc e; she did not cha lleng e the statutory basis of the a

war d or the r eq u i re m en t fo r immediate pa y ment. 226 F. App’ x at 548–49. I n the absence of statutory authority for this restitution order, we vacate that portion of the se ntence
. 2
V.
For the a b ove re asons, we A FF I RM Edkins’s conviction, VACATE his sentenc e and restitution order, a

nd REMAND for

rese ntencingproce eding s consistent with this opi nion.