1

 PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 12-3109

____________

UNITED STATES OF AMERICA

v.

MORDCHAI FISH,

a/k/a Martin Fisch, 

a/k/a Mordechai Fisch,

 MORDCHAI FISH,

 Appellant 

 

On Appeal from the United States District Court

for the District of New Jersey

(D.C. No. 3-11-cr-00210-001)

District Judge: Honorable Joel A. Pisano

 

 

Argued on May 15, 2013

Before: SLOVITER, FUENTES and ROTH, Circuit Judges

(Opinion filed: October 01, 2013)
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Harvey Weissbard, Esquire (Argued)

Genova Burns Giantomasi & Webster

494 Broad Street, 6th Floor

Newark, NJ 07102

Counsel for Appellant

Mark E. Coyne, Esquire

David W. Feder, Esquire (Argued)

Caroline A. Sadlowski, Esquire

Office of United States Attorney 

970 Broad Street

Newark, NJ 07102

Counsel for Appellee

O P I N I ON 

ROTH, Circuit Judge:

Mordchai Fish appeals the District Court’s July 5, 

2012, judgment of sentence. He argues that the District Court 

erred by imposing a two-level enhancement for sophisticated 

money laundering under U.S.S.G. § 2S1.1(b)(3). For the 

reasons that follow, we will affirm the judgment of sentence.

I. Background

Fish, a rabbi in Brooklyn, New York, was a target of a 
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large investigation into public corruption and money 

laundering in Brooklyn and New Jersey. The investigation 

began when Solomon Dwek, a cooperating witness who was 

charged with bank fraud in 2006, informed law enforcement 

that several rabbis, including Fish, were laundering money 

through tax-exempt Jewish charities known as “gemachs.”

Dwek, under law enforcement supervision, approached 

Fish about laundering what Dwek claimed were the proceeds 

of illegal endeavors, namely a bank fraud scheme and an 

operation that produced and sold counterfeit handbags. The 

“proceeds” were in fact funds provided by the government. 

Between May 2008 and July 2009, Fish participated in 

approximately twelve money laundering transactions

involving over $900,000. To execute these transactions,

Dwek would deliver to Fish bank checks made out to 

gemachs and rabbis, and Dwek would receive cash in 

exchange, less a commission (usually 10% of the check 

value). These check-for-cash exchanges took place at various 

locations, including a residence, a pizzeria, a bakery, a 

grocery store, a mikva (ceremonial bath house), and an office 

where Fish’s contacts had a safe, cash-counting machines, 

and checks and currencies from different countries. The

exchanges were at times scheduled only hours in advance and 

often involved numerous couriers. 

Fish made efforts to conceal the money laundering

operations by giving Dwek SIM cards for his cell phone.

1 He 

warned Dwek to sweep his car and phones for detection 

devices and to use code when speaking to associates about 

 

1 A cell phone user can change the number on a cell phone by 

inserting a new SIM card.
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transactions. In recordings made by Dwek, Fish stated that he 

had a number of money laundering connections, could 

launder money through several different rabbis, knew how 

much cash certain individuals had available at specified 

times, and had met with the “main guy” running one of the 

networks. Fish and another participant in the scheme, Levi 

Deutsch, said that the cash came from the diamond and 

jewelry business, and Deutsch indicated that the operation 

extended to Israel and Switzerland.2

On April 8, 2011, pursuant to a plea agreement, Fish 

pled guilty to a one-count Information charging him with 

conspiracy to commit money laundering, in violation of 18 

U.S.C. § 1956(h). The parties agreed that the total offense 

level applicable to Fish under the U.S. Sentencing Guidelines 

would be at least 21. The government reserved the right to 

argue for a two-level enhancement under U.S.S.G. § 

2S1.1(b)(3) for sophisticated money laundering, and Fish 

reserved the right to argue against this enhancement.

In the presentence report, the Probation Department 

recommended that Fish should receive the two-level 

enhancement under U.S.S.G. § 2S1.1(b)(3) and calculated a 

total offense level of 23. At sentencing on July 3, 2012, the 

District Court reviewed the sentencing submissions, including 

a video of meetings between Fish, Dwek, and others, and 

applied the two-level enhancement under U.S.S.G. § 

2S1.1(b)(3). The offense level of 23 resulted in an advisory 

 

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Fish objected to specific paragraphs in the presentence 

report that mentioned his references to “Israel.” He claimed 

that these references were to a person named “Israel” and not 

to the country.
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Guidelines range of 46 to 57 months, and the District Court 

sentenced Fish to 46 months imprisonment. This appeal 

followed.

II. Discussion3

A. Standard of Review 

The parties disagree regarding the appropriate standard 

of review: Fish urges us to exercise plenary review over the 

District Court’s application of U.S.S.G. § 2S1.1(b)(3) while 

the government asserts that we should review for clear error. 

Only two courts of appeals have articulated a standard of 

review for a district court’s application of U.S.S.G. § 

2S1.1(b)(3): the Eighth Circuit reviews the application of 

U.S.S.G. 2S1.1(b)(3) de novo, United States v. Pizano, 421 

F.3d 707, 732 (8th Cir. 2005), and the Fifth Circuit reviews 

for clear error, United States v. Miles, 360 F.3d 472, 481 (5th 

Cir. 2004). 

This is an issue of first impression in this Court. 

While we have not addressed this precise question, we find 

instructive how we have reviewed challenges to a district 

court’s application of the Guidelines in other contexts. In 

cases, like this one, in which there is no dispute over the 

factual determinations but the issue is whether the agreedupon set of facts fit within the enhancement requirements, we 

have reviewed for clear error the district court’s applications 

of those facts to the Guidelines. See, e.g., United States v. 

 

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The District Court had jurisdiction pursuant to 18 U.S.C. § 

3231, and we have jurisdiction pursuant to 18 U.S.C. § 

3742(a) and 28 U.S.C. § 1291.
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Richards, 674 F.3d 215, 223 (3d Cir. 2012). We will adopt 

that same standard here in reviewing the application of the 

undisputed facts to the requirements for the enhancement for 

sophisticated money laundering.

B. Application of Enhancement

Fish argues that the District Court erred by imposing 

the two-level enhancement for sophisticated money 

laundering under U.S.S.G. § 2S1.1(b)(3). This section 

provides, “[i]f . . . the offense involved sophisticated money 

laundering, increase by 2 levels.” U.S.S.G. § 2S1.1(b)(3). 

Application Note 5 further explains: 

For purposes of subsection (b)(3), 

‘sophisticated laundering’ means complex or 

intricate offense conduct pertaining to the 

execution or concealment of the 18 U.S.C. 1956 

offense.

Sophisticated laundering typically involves the 

use of

(i) fictitious entities;

(ii) shell corporations;

(iii) two or more levels (i.e., layering) of 

transactions, transfers, or transmissions, 

involving criminally derived funds that were 

intended to appear legitimate; or

(iv) offshore financial accounts.

U.S.S.G. § 2S1.1(b)(3), App. Note 5. 

Fish argues that the District Court erred in concluding 

that he engaged in sophisticated money laundering for 
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purposes of U.S.S.G. § 2S1.1(b)(3) because his conduct was 

not “complex or intricate” and involved none of the factors of 

sophisticated money laundering listed in the Application Note

5. We agree that the determinative factors of sophistication in 

this case are not any the five factors listed in Application 

Note 5. We disagree, however, that a finding of the existence 

of those listed facts is necessary to a determination that a 

particular scheme to launder money was sophisticated. 

The District Court imposed the two-level enhancement 

after noting that it “[did] not feel constrained to find the 

factors in the guidelines to be exhaustively shown.” We 

agree with that conclusion. The factors listed in Application 

Note 5 are illustrative but not required; they are typical but 

non-exhaustive. When the modus operandi of a money 

laundering scheme is not made up of the Application Note 5 

factors, the district court must establish the relevant facts 

concerning the operation of the scheme and then determine 

from a review of those facts whether the scheme is complex 

or intricate. 

In making this determination, the District Court made 

the following factual findings: 

This was a long-running scheme, . . . [,] it 

became difficult to uncover because it used 

multiple outlets for cash exchanges, used 

multiple couriers, multiple locations for the 

transactions[,] [t]here was an effort made by the 

perpetrators to keep even from Dwek some of 

the knowledge of the underlying aspects of the 

case . . . [,] there was an effort made to evade 

detection because there [was] the use of codes 
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and there [were] electronic devices which had 

been changed and moved around, changing SIM

cards, et cetera, and we also know that the 

incoming cash necessarily originated from 

numerous other accounts or sources. 

The District Court reviewed the “entire scenario involving 

other conspirators and other perpetrators and the fact that Fish 

was able to conduct these transactions over a long-running 

period with such facility, with so many different participants 

and so many unknown sources of money.” 

The court found these facts by a preponderance of the 

evidence and applying them to the standards of complexity 

and intricacy required for sophisticated money laundering, 

concluded with “no difficulty . . . from a simple commonsense point of view, this [scheme] had to be sophisticated.” 

It is clear from the reasoning of the District Court that 

the elements of complexity and intricacy of the scheme that 

the District Court found to be relevant were the duration of 

the scheme, the difficulty in uncovering it because of the use 

of multiple outlets for cash exchanges, multiple couriers and 

other participants, and multiple locations; the secrecy of the 

underlying aspects of the scheme; the efforts to evade 

detection by the use of codes and untraceable electronic 

devices; and the multiple sources of cash. Our clear error

review convinces us that the District Court appropriately 

considered the factors that make a scheme sophisticated and 

that it did not err in establishing that the facts of the scheme 

supported the determination of sophistication.4

 

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Fish argues that we should be wary of setting the 
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Few courts of appeals have analyzed U.S.S.G. § 

2S1.1(b)(3), and most have done so in cases involving at least 

one of the factors of sophisticated money laundering 

identified in Application Note 5. See United States v. 

Fernandez, 559 F.3d 303, 320 (5th Cir. 2009) (affirming the 

application of the enhancement because the district court 

“could have concluded that the charged transactions involved 

. . . ‘layering’ [and] . . . shell corporations”); Charon, 442 

F.3d at 891-92 (affirming the district court’s application of 

U.S.S.G. § 2S1.1(b)(3) where the district court found that the

defendant’s actions constituted layering); Pizano, 421 F.3d at 

731 (holding that the district court did not err in applying the 

sophisticated laundering enhancement “because the district 

court found that the [defendant] engaged in layering and she 

does not dispute that finding”); Miles, 360 F.3d at 482

(affirming the application of the enhancement because 

“[w]hen an individual attempts to launder money through 

‘two or more levels of transactions,’ the commentary clearly 

subjects an individual to the sophisticated laundering 

enhancement”). 

The Fifth Circuit Court of Appeals, however, affirmed 

the application of U.S.S.G. § 2S1.1(b)(3) in a case, similar to 

this one, that did not involve any of the factors of 

sophisticated money laundering identified in Application 

Note 5. See United States v. Chon, 713 F.3d 812, 823 (5th 

Cir. 2013). In that case, the court rejected the defendant’s 

 

sophistication bar too low. We do not believe that allowing 

district courts to look beyond the “typical” examples of 

sophisticated money laundering identified in Application 

Note 5 sets the bar too low.
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argument that his actions “[did] not constitute ‘sophisticated 

means’ as defined in the sentencing commentary” to U.S.S.G. 

§ 2S1.1(b)(3) and held that “[m]aintaining two sets of books, 

skimming income on a daily basis, and disguising aliensmuggling proceeds as ‘parking income’ in an attempt to 

make the criminally derived funds appear legitimate are 

sufficiently complex to support the enhancement . . ..” Id. 

Similarly here we reject Fish’s argument that his 

conduct does not constitute sophisticated money laundering. 

There are adequate facts here to support the District Court’s

conclusion that the elements and procedures of the scheme 

made it a sophisticated one.

III. Conclusion

For the foregoing reasons, we will affirm the District 

Court’s judgment of sentence.