UNPUBLISHED

UNITED STATES COURT OF APPEALS 

FOR THE FOURTH CIRCUIT 

No. 08-4430

UNITED STATES OF AMERICA, 

 Plaintiff - Appellee, 

 v. 

TIMOTHY RAY CLINE, 

 Defendant - Appellant. 

Appeal from the United States District Court for the Southern 

District of West Virginia, at Bluefield. David A. Faber, 

District Judge. (1:06-cr-00161-1) 

Argued: March 27, 2009 Decided: June 9, 2009 

Before MICHAEL and TRAXLER, Circuit Judges, and Thomas D. 

SCHROEDER, United States District Judge for the Middle District 

of North Carolina, sitting by designation. 

Affirmed by unpublished per curiam opinion. 

ARGUED: John Miles Morgan, Charleston, West Virginia, for 

Appellant. Larry Robert Ellis, OFFICE OF THE UNITED STATES 

ATTORNEY, Charleston, West Virginia, for Appellee. ON BRIEF:

Dwane L. Tinsley, HENDRICKSON & LONG, PLLC, Charleston, West 

Virginia, for Appellant. Charles T. Miller, United States 

Attorney, Charleston, West Virginia, for Appellee. 

Unpublished opinions are not binding precedent in this circuit. 
PER CURIAM: 

Timothy Ray Cline pled guilty to one count of tax evasion 

under 26 U.S.C. § 7201 and one count of Social Security fraud 

under 42 U.S.C. § 408(a)(4). He appeals his sentence, 

contending the district court erred in calculating his sentence 

and made incompatible findings of fact. Finding no error, we 

affirm for the reasons stated below. 

I. 

From September 1991 to March 2003, Cline received Social 

Security Disability Insurance Benefits (“DIB”) in amounts 

ranging from $761 to $1,370 a month, based on a prior 

determination that he suffered from qualifying disabilities.1 

J.A. 973. From February 1995 to March 2003, Cline received 

payments totaling $35,622. J.A. 13-14. 

In 1993, Cline started a chain of nightclubs and adult 

entertainment establishments in southern West Virginia which he 

owned, operated and managed through a number of interrelated 

corporate entities operating generally under the name “Southern 

X-posure.” J.A. 941-49, 953-64. Although he did not draw a 

regular salary or wage from any of his companies, he regularly 

appropriated the cash door revenue, or “cover charge,” collected 

 1

 Cline became entitled to DIB in September 1991 with a 

primary diagnosis of degenerative joint disease and a secondary 

diagnosis of depression. J.A. 973. 

2
at the nightclubs. J.A. 941, 958. From 2001 through 2003 

alone, Cline drew an estimated $200,000. (Id.) Neither Cline 

nor any of his companies reported this income to the Internal 

Revenue Service (“IRS”). J.A. 971. 

Following the filing of an Information, Cline pled guilty 

pursuant to a plea agreement to federal income tax evasion, in 

violation of 26 U.S.C. § 7201, and Social Security fraud, in 

violation of 42 U.S.C. § 408(a)(4). J.A. 11-14. 

During a three-day sentencing hearing, Cline pursued a 

previously filed Motion for Downward Departure Based on 

Diminished Capacity under U.S. Sentencing Guideline (“USSG” or 

“Guidelines”) § 5K2.13.2 Cline presented the expert testimony of 

Dr. Robert Miller, a forensic psychiatrist, and Timothy Saar, 

Ph.D., a treating psychologist. Dr. Miller had administered a 

series of psychiatric and psychological tests to determine 

Cline’s mental capacity, and Dr. Saar had treated Cline for 

substance abuse. Based on their interaction with Cline and, in 

part, on their independent review of Cline’s medical history 

predating the offenses, both Drs. Miller and Saar testified that 

Cline suffered from mental and emotional conditions supporting a 

finding of the diminished capacity required for a downward 

departure. J.A. 86, 194-98, 878. Cline refused to submit to an 

 2

 Cline was sentenced pursuant to the Guidelines in effect 

on November 1, 2007. 

3
examination by Dr. Ralph Smith, the Government’s expert, who 

testified that certain of Cline’s test results indicated that he 

had inflated and falsified symptoms during his testing and, 

consistent with Cline’s medical history, that he had a high 

probability of malingering. J.A. 435-40, 458, 482, 489, 493, 

495, 919, 922-23. 

The district court denied Cline’s motion and, instead, 

applied a 2-level enhancement under USSG § 3C1.1 for obstruction 

of justice, based on its finding that Cline had willfully 

manipulated his test answers in an attempt to demonstrate he 

possessed the diminished mental capacity necessary to obtain a 

downward departure. J.A. 1078. The district court also 

declined to apply a reduction for acceptance of responsibility 

under USSG § 3E1.1. J.A. 1076. 

To determine the appropriate base offense level for Cline’s 

tax evasion count, the district court calculated the tax loss to 

be $266,722. J.A. 607-08, 1070. To arrive at this figure, the 

district court characterized the door revenue as a dividend 

payment to Cline from one of his companies. J.A. 527, 607-08. 

It concluded that the company would have paid $69,608 in taxes 

on the door revenue prior to its distribution as a dividend and 

included this amount in the total tax loss calculation. (Id.) 

Based on a tax loss greater than $200,000, the district court 

4
assigned a base offense level of 18 to the tax evasion count. 

J.A. 1077; USSG § 2T4.1. 

The district court also concluded that the loss for the 

Social Security fraud count was $35,622, the entire amount of 

DIB Cline was charged with improperly receiving. J.A. 607, 

1078. It denied Cline’s request to offset from this amount the 

Social Security and Medicare taxes he had inadvertently overpaid 

on other, unrelated income. The district court determined that 

the Social Security fraud count carried a base offense level of 

12, the sum of a base offense level of 6 plus a 6-level 

enhancement for causing loss in excess of $30,000. J.A. 1078; 

USSG § 2B1.1. 

Based on these findings, the district court imposed a 

sentence of 37 months imprisonment. Judgment was entered on 

April 2, 2008, and Cline timely appealed. 

II. 

We exercise jurisdiction over this appeal under 28 U.S.C. § 

1291 and 18 U.S.C. § 3742(a). Cline challenges the district 

court’s sentence, contending it erred (1) in applying a 2-level 

obstruction of justice enhancement under § 3C1.1, (2) in failing 

to credit his overpayment of Social Security and Medicare taxes 

in calculating the amount of loss for the Social Security fraud 

count, and (3) in making conflicting findings of fact with 

5
respect to the characterization of the unreported door revenue 

he appropriated from his nightclubs for personal use. We 

discuss each assignment of error in turn. 

III. 

A. 

 Cline raises three related challenges to the district 

court’s imposition of the 2-level enhancement for obstruction of 

justice under § 3C1.1 in connection with his attempt to obtain a 

downward departure for diminished capacity under § 5K2.13. 

First, he claims that the district court improperly relied on 

pre-offense conduct. Second, he argues that the district court 

erred in concluding that he intentionally gave false information 

to his experts in connection with tests they administered for 

their analysis and testimony. And third, he contends that, even 

if he falsified test information, his conduct did not rise to 

the level required to impose the obstruction of justice 

enhancement. 

1. 

We first address Cline’s challenge to the district court’s 

determination that § 3C1.1 applies to the facts of his case. 

This is a legal issue, which we review de novo. United States 

v. Hicks, 948 F.2d 877, 884 (4th Cir. 1991). 

6
A 2-level increase in a defendant’s offense level is 

authorized if “the defendant willfully obstructed or impeded, or 

attempted to obstruct or impede, the administration of justice 

with respect to the investigation, prosecution, or sentencing of 

the instant offense of conviction” and “the obstructive conduct 

related to the defendant’s offense of conviction and any 

relevant conduct.” USSG § 3C1.1. Cline argues that the 

district court relied on pre-offense medical records to support 

the enhancement and that this reliance was improper because any 

obstructive conduct evidenced therein is not related to either 

of the offenses of conviction. 

Dr. Miller, Cline’s expert, administered a series of 

psychiatric and psychological tests on Cline to determine his 

eligibility for a downward departure. Among the tests he 

administered were: two IQ tests, two Malingering Probability 

Scale tests (MPS), the Minnesota Multiphasic Personality 

Inventory test (MMPI-2), and the BRIEF-A test (measuring 

executive ability and behavior regulation). J.A. 203-10. In 

rendering his opinion, Dr. Miller relied on the lower of the IQ 

scores, showing an IQ of 84. J.A. 887. He also rejected the 

first MPS test result that showed a 99% probability that Cline 

was malingering and, when the second test result was invalid, 

rejected it as well. J.A. 243-47. Cline’s MMPI-2 test results, 

which suggested that he experienced moderate to severe emotional 

7
distress and was introverted and withdrawn, J.A. 232-33, 888, 

also showed a high correlation with having been exaggerated for 

secondary gain. J.A. 236. Cline’s BRIEF-A test results raised 

concerns about his ability to “initiate problem solving or 

activity, sustain working memory, plan and organize problemsolving approaches, [and] attend to task-oriented output.” J.A. 

888. Dr. Miller adopted the BRIEF-A test results as valid 

despite the fact that Cline’s answers put him in the 99th 

percentile of all test takers for severity and an instruction in 

the test’s interpretative guide cautioned that the results 

should be questioned. J.A. 268-69. Dr. Miller also considered 

and relied upon Cline’s medical records, including pre-offense 

records, along with his other testing in rendering his opinion 

that Cline suffered from diminished capacity and had an IQ of 

84, demonstrating borderline intellectual functioning. J.A. 

886-89. 

Dr. Smith, the Government’s expert, formed his opinion 

based on the same test results Dr. Miller interpreted because 

Cline refused to submit to Dr. Smith’s examination. J.A. 429. 

Dr. Smith opined that Cline’s higher IQ test score of 88 was 

more accurate and, although within the low average intelligence 

range of 80-88, did not support a conclusion of borderline 

intellectual functioning. (Id.) Dr. Smith further criticized 

Dr. Miller for rejecting the first MPS test result that revealed 

8
that Cline was malingering so he could conduct a second MPS 

test, whose results he also rejected. J.A. 437-38. He also 

opined the MMPI-2 test result demonstrated “extreme overendorsement” by Cline and indicated that he was “trying to 

create the impression of a severe psychological problem.” J.A. 

436. As to the BRIEF-A test results, Dr. Smith testified that 

Cline “pegs it out at the very top, as if he has very, very, 

very severe problems in all those areas and it just doesn’t 

comport with the rest of his history to have that serious a 

problem.” J.A. 439. In short, Dr. Smith opined that the 

results obtained by Dr. Miller undercut a finding of diminished 

capacity and contained significant evidence of malingering, all 

of which were inconsistent with the decades of evidence of 

Cline’s ability to thrive in the business world. J.A. 458, 482, 

919, 923. 

The district court concluded that Dr. Miller deviated from 

standard testing methodology, ordered and repeated certain tests 

to significantly influence the results, “disregarded results 

indicating an extremely high probability” that Cline was 

malingering, and failed to account for Cline’s ability to 

function day-to-day. J.A. 1073. It found that Cline “attempted 

to manipulate the results of his psychiatric and psychological 

evaluations in order to obtain a downward departure under § 

5K2.13.” J.A. 1076. The § 3C1.1 enhancement was supported, it 

9
concluded, by “test results indicating an extremely high 

probability of malingering, by defendant’s refusal to submit to 

an independent evaluation for purposes of his motion for a 

downward departure, and by the conclusions of Dr. Ralph Smith,” 

the Government’s expert who confirmed a determination of 

malingering. J.A. 1076. 

There is no evidence that the district court improperly 

based its application of the § 3C1.1 enhancement on Cline’s preoffense medical records.3 Rather, it based its determination on 

evidence that Cline malingered on psychiatric and psychological 

evaluations administered by Dr. Miller, the results of which 

were furnished to the district court in support of a downward 

departure in the present case. (Id.) Thus, we conclude that 

§ 3C1.1 was properly applied based on the facts before the 

district court. 

 3

 To the extent that Drs. Miller, Saar and Smith referred to 

Cline’s pre-offense medical records in arriving at their 

respective conclusions as to Cline’s condition, it bears noting 

that Cline introduced the records himself. Cline’s Motion to 

Depart Downward Based on Diminished Capacity references his 

extensive pre-offense mental history, including this “extensive 

15 year history of psychiatric treatment involving several 

Clinicians.” J.A. 878, 881-82. The expert reports Cline 

submitted in support of his motion also rely on the records. 

J.A. 887-88. Moreover, his counsel expressly invited the 

inquiry at the sentencing hearing by stating that Cline had a 

“constitutional right” to bring to the court’s attention the 

“mental history that [Cline] had for some 17 years.” J.A. 615. 

10
2. 

Cline further contends that the district court erred in 

concluding that he intentionally falsified his test results. We 

review a district court’s factual findings for clear error. 

United States v. Layton, ___ F.3d ___, 2009 WL 1110814, at *2 

(4th Cir. Apr. 27, 2009). Under a clear error standard of 

review, a district court’s finding will be reversed only if 

there is a “definite and firm conviction that a mistake has been 

committed.” United States v. Stevenson, 396 F.3d 538, 542 (4th 

Cir. 2005) (internal quotation marks and citation omitted). 

The record amply supports the finding that Cline 

intentionally faked test results in an effort to reduce his 

sentence. For example, one of the tests, the MPS, is 

specifically designed to detect malingering. It demonstrated 

that Cline had a 99% probability of doing so. J.A. 437. 

Cline’s MMPI-2 and BRIEF-A results also showed that he was 

grossly exaggerating his symptoms for secondary gain. J.A. 235-

36, 436, 438-40, 835, 839. That Cline’s expert, Dr. Miller, 

rejected the MPS results and simply accepted the other test 

results as valid despite their serious deficiencies does not 

preclude the district court from relying on such evidence of 

malingering. J.A. 269-70, 210. 

After considering Cline’s evidence, the district court 

concluded that Dr. Saar’s testimony was “unsupported by notes or 

11
records of his appointments with the defendant” and that Dr. 

Miller “deviated from standard testing methodology” and 

disregarded key test results that undermined his opinion. J.A. 

1073. Instead, the district court found the testimony of Dr. 

Smith, whose report Dr. Miller characterized as “excellent, 

well-written and well-reasoned,” to be more consistent with the 

record as a whole. J.A. 196. Dr. Smith concluded that Cline’s 

MMPI-2 results evidenced his “distortion or exaggeration of the 

severity of [his] psychopathology in an attempt to derive 

secondary gain . . . and [that he] has distorted and greatly 

exaggerated his problems to create the impression of a severe 

psychological problem.” J.A. 919. In concluding that Cline 

“willfully manipulated his test answers in an attempt to 

demonstrate the mental capacity necessary to obtain a downward 

departure,” J.A. 1074, the district court plainly found Dr. 

Smith’s testimony more credible. A district court’s credibility 

determinations receive “great deference.” United States v. 

Feurtado, 191 F.3d 420, 424 n.2 (4th Cir. 1999). Moreover, in 

situations where there are “two permissible views of the 

evidence, the [district court’s] choice between them cannot be 

clearly erroneous.” Stevenson, 396 F.3d at 542 (internal 

quotation marks and citation omitted). Thus, Cline fails to 

demonstrate that the district court clearly erred in concluding 

that he falsified test information based on the court’s 

12
crediting of Dr. Smith’s testimony over that of Drs. Miller and 

Saar. 

3. 

Cline contends that, even had he falsified responses on Dr. 

Miller’s tests, such conduct would not rise to the level of 

egregiousness necessary to trigger the § 3C1.1 enhancement. 

(Appellant’s Br. at 19.) We review the application of § 3C1.1 

to the facts de novo. Hicks, 948 F.2d at 884. 

The district court found that Cline’s deliberate 

manipulation of his answers to psychiatric and psychological 

tests was calculated to lead his examiners to misrepresent his 

mental capacity to the district court. J.A. 619-22. Providing 

materially false information to a judge is an explicit basis for 

the enhancement. USSG § 3C1.1 cmt. n.4. Material information 

means “evidence, fact, statement or information that, if 

believed, would tend to influence or affect the issue under 

determination.” USSG § 3C1.1 cmt. n.6. Cline’s falsification 

of test results was intended to mislead the district court into 

concluding that he was eligible for a downward departure. 

Therefore, the district court properly applied the enhancement 

upon a finding that Cline willfully obstructed the 

administration of justice with respect to his sentencing by 

providing false answers to the district court through his 

examiners, with the goal of receiving a downward departure to 

13
which he was not entitled. See United States v. Frierson, No. 

08-6254, 2009 WL 766533, at *2 (10th Cir. Mar. 24, 2009) 

(unpublished) (affirming district court’s imposition of 

obstruction of justice enhancement under § 3C1.1 for defendant’s 

malingering on his post-plea competency tests); United States v. 

Greer, 158 F.3d 228, 234-38 (5th Cir. 1998) (finding obstruction 

enhancement proper for defendant who feigned incompetency by 

misrepresenting his psychiatric condition to his examiners, 

intending for them to present their inaccurate impressions to 

the court). 

B. 

Cline also challenges the district court’s sentence on his 

Social Security fraud count. The district court concluded that 

the loss on this count was $35,622, the total amount of DIB 

Cline received from February 1995 to March 2003. J.A. 1078. In 

2001 and 2002, Cline inadvertently overpaid Social Security and 

Medicare taxes on other income in the amount of $14,380, a sum 

he argues should have been credited against the amount of DIB 

payments he improperly received from the Government. We review 

the district court’s application of the Guidelines de novo. 

Layton, ___ F.3d at ___, 2009 WL 1110814, at *2. 

The district court calculated the Government’s loss under 

USSG § 2B1.1, cmt. n.3(F)(ii), which provides, in pertinent 

part, that in government benefit cases “loss shall be considered 

14
to be not less than the value of the benefits obtained by 

unintended recipients.” The district court thus determined that 

the loss for the Social Security fraud count was $35,622, the 

total amount of DIB Cline was charged with improperly receiving. 

J.A. 1078. Cline urges application of the “net loss” theory 

under which the Government’s loss would be reduced by “the money 

returned . . . by the defendant . . . to the victim before the 

offense was detected.” USSG § 2B1.1, cmt. n.3(E). A credit for 

his overpayment of taxes would reduce the amount of the social 

security loss to $21,242, resulting in a 2-level decrease in his 

base offense level.4 USSG § 2B1.1(b)(1). 

We find Cline’s argument to be without merit. The district 

court’s calculation of loss was consistent with the Application 

Notes, which define loss as “the greater of actual or intended 

loss.” USSG § 2B1.1 cmt. n.3(A). Actual loss is “the 

reasonably foreseeable pecuniary harm that resulted from the 

offense,” and intended loss is “the pecuniary harm that was 

intended to result from the offense.” USSG § 2B1.1 cmt. 

n.3(A)(i)-(ii). In making “loss” calculations, the sentencing 

court is instructed to hold the defendant “responsible for the 

amount of loss which was intended, not the actual loss 

ultimately sustained.” United States v. Loayza, 107 F.3d 257, 

 4

 The base offense level is enhanced by 4 levels for a loss 

greater than $10,000, and by 6 levels for a loss greater than 

$30,000. USSG § 2B1.1. 

15
266 (4th Cir. 1997) (refusing to apply net loss theory and 

credit payments made to victims of Ponzi scheme against amount 

of loss intended by perpetrator); cf. United States v. Phelps, 

478 F.3d 680, 682 (5th Cir. 2007) (“We are not persuaded that 

the amount of tax loss Appellant intended to cause should be 

reduced simply because his scheme to defraud apparently 

inadvertently caused payment of excess social security taxes.”). 

Because Cline’s overpayments were “erroneous,” his intended 

harm was the full amount of DIB he improperly received. 

Moreover, Cline has provided no case applying the net loss 

theory to government benefit cases, and nothing in the 

Application Notes suggests such an application is required here. 

Accordingly, the district court properly applied § 2B1.1 cmt. 

n.3(F)(ii) to calculate “loss” in the Social Security fraud 

count as the sum total of DIB payments Cline improperly received 

from the Government.5 

 5

 Cline is correct that the trial court’s Sealed Memorandum 

of Sentencing Hearing (“Sealed Memorandum”) misstates his 

argument as one requesting a credit against the calculation of 

loss for the tax evasion count, rather than for the Social 

Security fraud count. J.A. 1072. However, the transcript from 

his sentencing hearing demonstrates that the district court 

understood his request as an offset against the loss for the 

Social Security fraud count, and orally denied it. J.A. 606-

607. Because the request was denied orally at the sentencing 

hearing, the error in the Sealed Memorandum had no impact on 

Cline’s sentence and does not alter the fact that the amount of 

loss was properly calculated under USSG § 2B1.1. 

16
C. 

Cline argues next that the district court committed clear 

error in calculating the loss on the tax evasion count when it 

characterized the unreported door revenue he appropriated from 

his nightclubs as dividend payments rather than a salary. Cline 

contends this error had two significant consequences. First, he 

claims it increased the amount of the tax loss and resulted in a 

higher base offense level for the tax evasion count. Second, he 

contends that it is incompatible with the district court’s 

findings of fact to support the Social Security fraud count. 

The district court’s characterization of the door revenue as a 

dividend payment is a factual determination reviewable for clear 

error. Layton, ___ F.3d at ___, 2009 WL 1110814, at *2. 

1. 

The district court calculated the loss for the tax evasion 

count at $266,772. This sum includes $69,608, the amount of tax 

one of Cline’s companies would have paid on the approximately 

$204,730 in unreported door revenue before paying it out to 

Cline as a dividend distribution.6 J.A. 670. Cline contends 

that the door revenue should have been classified as a salary 

and thereby a deductible expense to Cline’s corporation on which 

 6

 The door revenue would have been treated first as income 

to one of Cline’s companies and been subject to taxation at the 

34% corporate rate before being paid out as a dividend to Cline 

individually. J.A. 527; see USSG § 2T1.1(c)(1)(A). 

17
no tax would have been owed, resulting in no net loss of tax 

revenue to the Government. Treated in this fashion, the 

Government’s loss on the tax evasion count would have been less 

than $200,000 and resulted in a base offense level of 16 rather 

than 18.7 J.A. 1077. 

Cline’s contention is without merit. The record is replete 

with testimony that although Cline was encouraged on more than 

one occasion by his accountant and his lawyer to draw a salary, 

he refused to do so. J.A. 311-12, 534, 951-52. The district 

court understandably found Cline’s post-conviction argument that 

he would have characterized the door revenue as a salary lacking 

in credibility. Moreover, in United States v. Delfino, 510 F.3d 

468, 473 (4th Cir. 2007), this court refused to engage in posthoc determinations of how a defendant, convicted of tax evasion, 

would have completed his tax returns had he not committed tax 

fraud.8 The district court’s characterization of the door 

revenue as a dividend was not clear error. 

 

 7

 A tax loss greater than $80,000 results in a base offense 

level of 16; whereas a tax loss greater than $200,000 results in 

a base offense level of 18. USSG § 2T2.1 & 4.1. 

8

 Cline attempts to distinguish Delfino on factual grounds, 

claiming that, unlike Delfino, he actually filed tax returns and 

cooperated with the IRS audit. (Pet’r Br. 35.) None of these 

facts affects the holding that a district court is not required 

to speculate and reconstruct what a convicted tax evader would 

have claimed as deductions on a hypothetical tax return. 

Delfino, 510 F.3d at 473. 

18
2. 

Cline contends lastly that the district court made 

incompatible findings of fact in classifying the door revenue as 

a salary for purposes of the Social Security fraud count and as 

a dividend in calculating the loss for the tax evasion count. 

This argument incorrectly presumes that the Social Security 

fraud count is premised upon his receipt of a salary. Cline’s 

conviction for Social Security fraud is premised on a violation 

of 42 U.S.C. § 408(a)(4), based on his failure to disclose 

events that affected his eligibility for DIB with the intent to 

fraudulently secure such payments in an amount greater than he 

was due.9 J.A. 14. 

An individual must be under a “disability” to qualify for 

DIB. 42 U.S.C. § 423(a)(1)(E). An individual is not eligible 

for DIB if he is engaged in substantial gainful work activity. 

20 C.F.R. § 416.920(b). Work is substantial if it involves 

doing significant physical or mental activities and is gainful 

if it “is the kind of work usually done for pay or profit, 

 9

 Section 408(a)(2) provides that whoever: 

“having knowledge of the occurrence of any event 

affecting (1) his initial or continued right to any 

payment under this subchapter, or (2) the initial or 

continued right to any payment of any other individual 

in whose behalf he has applied for or is receiving 

such payment, conceals or fails to disclose such event 

with an intent fraudulently to secure payment either 

in a greater amount than is due or when no payment is 

authorized shall be guilty of a felony.” 

19
20

whether or not a profit is realized.” 20 C.F.R. 

§ 416.972(a)-(b) (emphasis added). In this case, Cline owned, 

operated and managed a chain of nightclubs and adult 

entertainment establishments through a complex corporate 

structure involving a number of entities. The record indicates 

that Cline was “very active” in the operation of his clubs, 

monitoring nightly alcohol sales and door revenues vigilantly 

and conducting weekly reviews of reports detailing dancers’ 

individual sales. J.A. 954, 957-961. Whether and how he was 

compensated is irrelevant -- the operative facts are that he was 

engaged in significant physical or mental activity that is 

usually done for pay or profit, thereby making him ineligible 

for DIB payments, and that he failed to disclose this activity. 

Because the nature of the compensation is not part of the 

offense conduct, Cline’s Social Security fraud conviction did 

not require a factual finding as to whether the compensation was 

a salary or a dividend. Therefore, no conflicting findings of 

fact exist between the Social Security fraud and tax evasion 

counts. 

IV. 

For the foregoing reasons, the sentence imposed on Cline by 

the district court is 

AFFIRMED.