P RE CE DE NT I AL UN I TED STATES CO UR T OF A PP EALS F O R T H E T H IR D C IR C U IT

N o. 09- 1165

UNI TE D ST ATE S OF AM ERI CA

v. M A RI A LI A N I D I S, A ppel l ant

O n A p p ea l from the U n it ed S tat es D istri ct C o u rt

fort he D i s t r i ctof N ew J er s ey ( D

. C

. N o. 07- cr - 00665- 001) D istri ct Ju d g e: H o n o rab le G arrettE

. B row n , Jr.

A r gued D ece m ber2, 2009 Be f o r e : F I S HE R, HAR DI M AN a n d S T A P L E T O N , C i r cui tJudges

. ( Fi l ed: M ar ch 19, 2010 )2 A n n a M . D u rb in Pet erG ol dber ger( A r gued) 50 R i t t enhous e Pl ace A r dm or e, PA 19003- 2276 C ouns el f orAppel l ant G eor ge S. L eone O ffi ce of U ni t ed St at es A t t orney 970 B r oad St r eet , R oom 700 N ew ark, N J 07102 G l enn J

. M or amar co ( A r gued) O ffi ce of U ni t ed St at es A t t orney C am den F ederal B uil ding & C ou rtho use 401 M arketSt r eet , 4t h Fl oor P. O

. B ox 2098 C amden, N J 08101 C ouns el f orAppel l ee

OPI NI ON O F THE COURT

F IS H E R , C i r cui tJudge

. M ar i a L i ani di s pl ed gui l t yt o thr ee c ount s of br i beryof a f e d e ra l em p lo y e e in v io latio n o f 1 8 U .S .C . § 2 0 1 . O n a p p e a l, L i ani di s cont ends t hat t he D i s t r i ctC our terr ed ats ent enci ng by i m pos i ng a 16- l evel i ncr eas e bas ed on i t s det erm i nat i on t hatthe “bene fi tr ece i ved” un derU

. S. S. G

. § 2C 1. 1( b) ( 2) w as betw een $1 , 00 0, 00 0 an d $ 2, 50 0 , 00 0. T o resol ve thi s i ssue, w e m ust3 defi ne the pr opercal cul at i on of “be nefi trec eive d” i n cas es w her e i l l egal br i bes ar e us ed t o obt ai n w hatw oul d ot herw i s e be leg a l co n tra c ts. F o llo w in g th e F if th C irc u it’ s a p p ro a c h in U nited S tates v. L an ders , 6 8 F .3 d 8 8 2 (5 th C ir. 1 9 9 5 ), w e h o ld t hat“bene fi tr ece i ved” und er § 2C 1. 1( b) ( 2) i s the netval ue, m i nus di r ectcos t s , acc rui ng t o t he ent i t yon w hos e beha l f the defe ndantpai d t he br i be. B eca us e the D ist ri ctC our tdi d not pr op e r l y a r t i c u l a t e a n d a p p l y t h i s s t a n d a r d , we wi l l v a c a t e and r emand forr e- s ent enci ng. I. A. Fr om 1992 t hr ough 2001, L i ani di s w or ked as a comput er s peci al i s tfort he Feder al A v iat i on A dm i ni s t r at i on ( “FA A ”) at t he A t l ant i c C i t yI nt ernat i onal A irp o rt
. D ur i ng thi s per i od, St even Li ani di s , M ar i a Li ani di s ’ s h u sb and, founded D i gi t al M anage m entSy s t ems, I nc. ( “D M S”) , a fa m i l y - ow ned comput er s e r v i c e s e n g i n e e r i n g c o m p a n y l o c a t e d i n A b s e c o n , N e w J e r s e y. D M S des i gned and su p p o rt ed co m p u ter ap p li ca ti o n s fo r av ia t i on s y s t ems thr ough contr act s w i t h the FA A

. I n 2001, L i ani di s l eft th e F A A t o s erve as D M S ’s presi den t , a po si t i on she h e ld t hr ough 2007. D a rre ll W o o d s, a n F A A e m p lo y e e a t th e A tlan tic C o u n ty Te c h n i c a l C e n t e rf

r o m 1 9 9 6 th r o u g h 2 0 0 5 a n d a l o n g t i me f r i e n d o f L i a n i d i s , wa s i n c h a r g e o f o v e r s e e i n g t h e DM S contr act s . Fr om J ul y9, 2001, t hr ough D ec em b er26, 2004, L i ani d is m ade a s er i es of about19 cas h paym ent s , t ot al i ngA l t hough t he Pr es ent ence I nves t i gat i on R epor ts tat es 1 t hatt he t ot al w as $159, 000, t he par t i es agr eed atthe Sent enci ng H e a ri n g th a t th e to ta l w a s c lo s e r t o $ 1 5 5 ,0 0 0 . (A p p . a t 1 2 .) 4 appr oximat el y$155, 000, t o W oods

. I n r eturn, W oods 1 i m pr oper l ys t eer ed con tr act s s uppor t i ng the FA A ’ s “Servi ce M o v e m e n t A d v iso r” c o m p u ter sy ste m (“ S M A c o n tra c ts” ) to D M S a n d , o n c e th e c o n tra c ts w e re a w a rd e d , im p ro p e rly authori zed increas es on those con t ract s. T h e S M A S tate m e n t o f

W o rk (“ S O W ” ) sp e c if

ied c e rta in aw ar d condi t i ons , i ncl udi ng the fol l ow i ng:

“ A s a c o n d iti o n o f

a w a rd th e C o n tra c to r sh a ll p e r f o r m th e wo r k a c t i v i t i e s d e s c r i b e d i n t h i s S OW p rim a rily a t th e [ F A A T e c h n ica l C e n ter ] a n d sh a ll m a in ta in a n o f

f ic e w ith in 5 m ile s o f

th a t s ite .” ( A p p . atSA 59 & SA 142, § 1. 2. ) T o compl yw i t h thi s offi ce re q u ire m e n t, D M S in iti a llyre n ted a sm a ll fa c ili ty , p re su m a b ly fr om a t h ir d par t y . T hen, i n J une 2003, L i ani di s ’ s hus band f o rm e d a re a l e sta te c o m p a n y n a m e d D E S F O , L L C a n d u se d it t o pur chase a l ar gerfac i l i t yw i t hi n fi ve mi l es of the Techni cal C e n ter , w h ich D E S F O th e n re n ted to D M S

. I n a d d iti o n to its r ent , D M S i ncurr ed a l i t anyof cos t s att he D E SFO offi ce, in c lu d in g , in tera lia , s al ar i es , payr ol l t axes , and cos t s as s oci at ed w i t h comput er equi pm ent , s uppl i es , cl eani ng, i ns ur ance , l egal a n d p ro f e s s io n a l a s s is ta n c e , a n d m e a ls a n d e n te rt a in m e n t. (I d. a t 7 2 -7 9 .)A ny m i nordi s cr epanc i es as t o t he exa ctfi gur es do not 2 a f f e c t th is a p p e a l. 5 T he S M A con t ract s w ere i n eff ect for a t otal of si x y ears . A l t hough t he contr act s w er e p r o c ur ed w i t h br i bes , D M S’ s actual w or k on t he contr act s w as l egi t i m at e. ( PSR ¶ 37. ) O ver al l , t he FA A pa i d DM S a t ot a l of $6 , 78 3, 87 7. 33 un de rt he SM A contr act s . D ur i ng t he s i x- y earper i od, L i ani di s r ece i ved a t ot al s al aryof $445, 298, and herhus band r ece i ved a tot al s al aryof $601, 525. 2
F r o m Se p t e mbe r2 0 0 4 , th r o u g h M a r c h 1 1 , 2 0 0 5 , th e F AA p re p a re d a c o m p e tit iv e so licita tio n f o r w o rk re late d to a se p a ra te c o mp u t e r s y s t e m, S u r f

a c e M a n a g e me n tS y s t e ms ( “ S M S ” )

. On N ov em ber 23, 2004 , aft er as king fo r Liani dis ’s sugg est i on s, W oods i ns er t ed a pr ovi s ion i n t he SM S sol i ci t at i on that e x c lu d e d la rg e r q u a lifie d b id d e rs a n d re stric ted c o m p e tit io n to s m al ler busi nes s es cl os ert o D M S i n s i ze. H ow ever , t he so li cit ati o n w as c an ce led – ap p are n tly d u e to th e b ri b ery i nves t i gat i on – pr i ort o anycontr actaw ar d. B. O n A u g u st 9 , 2 0 0 7 , a g ra n d ju ryc h a rg e d L ian id is w ith o n e c o u n t o f

c o n sp ira c yto d e f

ra u d th e U n it e d S tate s, in vi ol at i on of 18 U

. S. C

. § 371; s event een c ount s o f bri beryof a fede r al empl oy ee, i n vi ol at i on of 18 U

. S. C

. § 201; and ei ght count s of m oneyl aunderi ng, i n vi ol at i on of 18 U

. S. C

. § 1957. O n F ebrua r y6, 2008, L i ani di s pl ed gui l t yt o t hr ee c ount s of b ri b eryo f a fe d era l em p loy ee in the U n it ed S tat es D istri ct C o u rt6 f o r th e D istric t o f

N e w Je rse y . T h e P lea A g re e m e n t ex p re ss ly s t at ed that t he par t i es w er e unabl e t o agr ee on t he ca l cul at i on of val ue, benef

i t , and l os s pur s uantt o U

. S. S. G

. § 2C 1. 1( b) ( 2). (A p p . a t 8 8 .) T he Pr es ent ence I nv est i gat i on R epor t( “PSR ”) recom m end ed thatt he D i stri ctC ou rti m po se a 16 -l evel i ncrease bas ed on i t s concl us i on t hatthe “benef i tr ece i ved” unde r § 2C 1. 1( b) ( 2) and the r efe r ence t abl e i n § 2B 1. 1 w as betw een $1, 000, 000 and $2, 500, 000. ( PSR ¶¶ 37- 38. ) A tthe D ece m ber 2 3 , 2 0 0 8 Sent enci ng H ear i ng, the D i s t r i ctC our tagr eed, bas ed on w hat appears t o b e t w o, al t ernat e t heo ri es. Fi r s t , ci t i ng t he Fi fth C i r cui t ’ s deci s i on i n U ni t ed Stat es v. L an ders , 6 8 F .3 d 8 8 2 (5 th C ir. 1 9 9 5 ), th e D istric t C o u rt h e ld t hatt he pr opercal cul ati o n of “be nefi tr ece i ved” unde r § 2C 1. 1 (b)( 2) deduct s di r ectcos t s , butnoti ndi r ectcos t s , fr om t he gr os s pr ocee ds of t he i l l egal l y obt ai ned cont r act s . ( A pp. at 14. ) I n appl y i ng t he L an ders ru le, th e D istric t C o u rt re f u se d to i nclude L i anidi s’ s proposed add i t i on al cost s as di rectcost s: “N ow , t he def

enda n tal s o as s ert s thats he had cos t s of pur chas i ng a bui l di ng w i t hi n fi ve mi l es of t he FA A s i t e w i t h a s ecur i t y sy st em, a l ab, c o m p u ter e q u ipm ent, back up eq u ip m e n t, add i t i on al l and scapi ng , trash rem ov al , pest con t rol , due s a nd subscri pti on s, cl eaning servi ces, an d ren t w h ich w as pa id by D M S , the d ef en d an t’ s corpor at i on, t o t he def

endantw ho pur chas ed the bui l di ng and [that ] thi s s houl d be cons i der ed a di r ectcos tand deduct ed. [The] G overnm ent7 di s put es that. I do notfi nd thatt hati s di r ect c o s t.” (I d. at 15

. ) T h e D istri ct C o u rtreit era ted s h o rt lythere af ter, “A s faras t he deduc t i o n fo r the overhead of t he b u il d ing as a di r ectcos tt o t he contr act , bui l di ng t hatt heypur chas ed and theyr ecei v ed r entfr om t he co rporat i on , I don’tthink th ati s a di rectcost an d I wi l l n o t c o n s i d e r i t a s s u c h u n d er t he g u id e lin e s .” (I d. a t 1 6 .) I n s o h o ld in g , the D istric t C o u rt e v id e n c e d its a g re e m e n t w ith th e G o v e rn m e n t, w h ich e stim a ted th e “ b e n e f it re c e iv e d ” to b e $ 3 ,2 8 7 ,1 9 2 b ysu b tra c tin g a s d ire c t co sts o n ly

“ d ire c t lab o r c o sts a n d o th e r sa lar ya n d w a g e s p a id , p a yro ll t axes , [and] empl oy ee be nefi t s . ” (I d. a t 1 3 .) A s an alt ernat i ve theory , t he D i s t r i ctC our tus ed L i anidi s’ s and h er husban d’s s al ari es as a proxyfor “b e n e f it r ece i ved”: “A s faras the al t ernat i ve theory , . . . [L i anidi s] w as abl e t o enj oyt he l i fes t y l e pr o vi ded by[her an d h er h u sb an d ’s] salari es w h ich to tal ed o v er a m i ll ion d ol l ar s . A nd al t hough s he s ay s thats he w o rk e d f o r it, th a t’s n o t th e p o in t. T h e p o in t is th a t w e h a v e th e se b rib e s p a id in c o n n e c tio n w ith t hi s w or k.

. . .C ouns el forL i ani di s cont ended at or al ar gum entt hatt he 3 s al aryt heoryw as t he s ol e bas i s for t he D i s t r i ctC our t ’ s deci s i on beca us e i tw as t he onl yt heorys etfor t h i n the PSR

. ( PSR ¶ 37- 3 8 .) T h e re c o rd is u n c lea r. O n o n e h a n d , the C o u rt b e g a n w ith a di s cus s i on of L an ders and cl as s i fi ed t he s al aryt heory“as t he alt ern ati v e the o ry . ” (A p p . at 15

. ) O n the oth er h an d , the C o u rt s t a t e d , i n c o n c l u s i o n , th a ti twa s a d o p t i n g th e P S R:

“ S o h a v in g e v a lu a t e d th e p re s e n te n c e re p o rt , I adopti tand fi nd i tt o be corr ect
. So w hatw e do h a v e h e r e i s a n o f

f e n s e l e v e l o f

2 5 , a c r i m i nal hi s t or ycat egory one, w hi ch gi ves us a r ange of 57 to 7 1 m o n th s u n d e r t h e a d v is o ry g u id e lin e s .” (I d. at17

. ) F urtherm ore, t he C ou rti m po sed a 16 -l evel i ncrease even t ho ug h t he C ou rtcou l d h ave im po sed an 1 8-l evel i ncrease undert he L an ders d ir e c t c o s t a p p ro a c h

. See U

. S. S. G

. § 2B 1. 1. W e w i l l add res s both theo ri es. T he D i stri ct C ou rt ’s use of a ne w l egal t heoryi s not pr obl emat i c beca us e nei t herFeder al 8 T h e d e f e n d a n t a n d h e r h u sb a n d w e re n o t th e o n ly empl oy ees , butt hi s w as t hei rcompanyand they ob t ai ned ov er a m i l l io n do l l ars i n cash salar i es. W h a twou l d h a v e h a p p e n e d h a d t h e yc o m pet ed fa ir lyfo r th e c o n tr a ct i s n o t bef o re m e. T h ere ’s n o g o o d w o rk e x c e p tio n to th e b ri b e ry la w s .” (I d. at15- 16. ) Fi ndi ng that t he sal ar i es al s o w arr ant ed a 16- l evel i ncr eas e, t he C our tadopt ed the PSR ’ s r ecomm endat i on. 3R ul e of Cri m i nal Pr ocedur e 32 nor our cas e l aw r equi r e a di s t r i ct cou r t t o a b i d e b y a p r o b a t i o n o f f i c e r ’ s i n t e rp r e t a t i o n o f t he S e n te n c in g G u id e lin e s . C f

. U ni t ed St at es v. H

uds on , 491 F. 3d 5 9 0 , 5 9 6 (6th C ir

. 2 0 0 7 ) (“W h il e c ase law req u ir es n o ti ce b ef o re a di s t r i ctcour tdepart s orvar i es fro m the r ecomm ended gui del i ne s ent ence , . . . [i tdoes ] notr equi r e not i ce w hen a di s t r i ctcour ti nt erpr et s the gui del i nes di ffe r ent l yfr om t he pr obat i on offi cer s - w hen i tappl ies the G ui del i nes i n a manner d if f e re n t f ro m w h a t is re c o m m e n d e d in th e p re s e n te n c e re p o rt .” ( quot at i ons and ci t at i ons om i t t ed) )

. M or eover , L i ani di s has not asse rt ed that sh e w as u n d u ly su rprised b ythe G o v ern m en t’ s $ 3 , 2 8 7 , 1 9 2 fig u re, w h ich w as c alcu lat ed u sing the P S R ’s p ro c e e d s f

ig u re o f $ 6 ,7 8 3 ,8 7 7 .3 3 a n d th e sa lar y , tax , an d b e n e f it fi gur es pr ovi ded byL i ani di s her s el f. T he j udgm entdi d notbecome fi nal , and t hus t he appe al 4 di d notr i pen, unt i l t he fi l i ng of an agr eed or derfort he cr i m i nal for fei tur e of $150, 000 on J une 10, 2009. 9 T he 16- l evel i ncr eas e r es ul t ed i n a t ot al offe ns e l evel of 2 5 , w h ich , w h e n co m b ined w ith L ianid is’ s crim inal h ist o ry ca tego ryo f I, pro d u ce d an ad v isoryS en tenc ing G u i del i nes r ange of 57 t o 71 m ont hs of i m pr i s onm ent
. A ft ergr ant i ng a tw o- l evel dow nw ar d var i ance of ni ne mont hs on acc ountof the d ef en d a n t’s co m p ell ing p erso n al circu m stan ce s, the C o u rt i m pos ed a s ent ence of 48 m ont hs of i m pr i s onm ent , fol l ow ed by t hr ee y ear s of s upervi s ed r el eas e. T he C our tal s o or der ed a fi ne of $75, 000 – $25, 000 foreac h count – and a s peci al as s es s m ent of $300. T he C our t ent er ed j udgm ent on D ece m ber 30, 2008, 410 and Li ani di s fi l ed a t i m el ynot i ce of appeal o f the 16- l evel i ncr eas e on J anuary13, 2009. II. Th e Di s t r i c tCo u r th a d j u r i s d i c t i on u n d e r1 8 U. S

. C. § 3 2 3 1 , a n d t h i s Co u r th a s j u r i s d i c t i on p u r s u a n tt o 2 8 U. S

. C. § 1291 and 18 U

. S. C

. § 3742( a)

. “W e re v ie w the D i s t r i ct C o u rt ’s in te rp re ta tio n o f th e S e n te n c in g G u id e li n e s d e n o v o ,” b u t w e re v iew th e D istric t C o u rt’s a p p lica tio n o f law to f a c t w ith d u e d e f e re n c e . U

ni t ed Stat es v. A qui no , 555 F. 3d 124, 127 ( 3d C i r . 2009)

. “W e re vi ew t he D i s t r i ct C our t ’ s fac tual fi ndi ngs for cl earerr or . ” U

ni t ed Stat es v. C ohen , 1 7 1 F

. 3 d 7 9 6 , 8 0 2 (3d C ir

. 1 9 9 9 ). III . L ian id is a rg u e s o n a p p e a l th a t th e D istric t C o u rt e rre d in i m p o s i ng a 16- l evel i ncr eas e pur s uantt o § 2C 1. 1( b) ( 2) under bo t h it s L an ders app roach and i t s sal ary t heo ry . W e w i l l add res s t he pr obl ems w i t h eac h appr oach i n turn, aft er a br i ef ove r vi ew o f § 2 C 1

. 1 (b)(2 ). A . Backg r ound U nderU

. S. S. G

. § 2C 1. 1( b) ( 2) , the o ffe ns e l evel of a defe ndantconvi ct ed of br i bi ng a fe der al em p l oy ee i ncr eas es bas ed on the “be nefi tr ece i ved ort o b e recei ved” i n excha nge forthe br i be:11 “I f the val ue of t he paym ent , t he bene fi tr ece i ved or to b e re cei ved i n r eturn fort he paym ent , t he v a l u e o f a n yt h i n g o b t a i n e d o rt o b e o b t a i n e d b y a p u b lic o f

f ici a l o r o th e rs a c tin g w ith a p u b lic offi ci al , ort he l os s t o the governm entfr om t he offe ns e, w hi cheve ri s gr eat es t , exceeded $5, 000, in c re a se b yth e n u m b e r o f lev e ls f ro m th e tab le in § 2 B 1 .1 . . . c o rr e s p o n d in g to th a t a m o u n t.” U

. S. Se n te nci ng G ui del i nes M anual § 2C 1. 1( b) ( 2)

. W e have h e ld th a t th e G o v e rn m e n t b e a rs th e b u rd e n o f sh o w in g “ b e n e f

it r ece i ved

. ” U

ni t ed Stat es v. P ena , 2 6 8 F

. 3 d 2 1 5 , 2 2 0 (3d C ir

. 2001) ( ci t i ng U

n itedS ta tes v . M

cD o w e ll , 888 F. 2d 285, 291 ( 3d C ir. 1 9 8 9 )). H e re , the G o v e rn m e n t alle g e s th a t th e “ b e n e f it r ec ei ved” i s betw een $1, 000, 000 and $2, 500, 000, w hi ch w arran ts a 1 6 -l ev el i n cre ase . U

. S

. S

. G

. § 2 B 1

. 1 (b)(1 ). T o d e ter m in e w h e th e r th e G o v e rn m e n t h a s m e t it s b u rde n , w e m u st de fin e the sco p e o f “b en ef it rec eive d

. ” W e a re a id e d b yth e § 2 C 1 .1 a p p lica tio n n o te s , w h ich d isc u ss “ b e n e f it r ece i ved” i n t erm s of “ne tval ue” a nd “pr ofi t ”: “The val ue of ‘ t he bene fi tr ece i ved ort o be re c e iv e d ’ m e a n s th e n e t v a lu e o f su c h b e n e f

it. E x am p les: (1) A g o v ern m en t em p loy ee , in return fora $500 br i be, r educe s the pr i ce of a pi ece of s urpl us pr o p ertyoffe r ed fors al e bythe governm ent fr om $10, 000 t o $2, 000; t he val ue of t he bene fi tr ece i ved i s $8, 000. ( 2) A $150, 000 contr acton w hi ch $20, 000 pr ofi tw as m ade w as aw ar ded i n r eturn fo r a br i be; the val ue of the12 benef i tr ece i ved i s $20, 000. D o n otdeductt he val ue of t he bri be i t s el f i n comput i ng t he val ue of t he b en efi tr ece i ved ort o be r ece i ved. I n t he pr ece di ng exampl es , t her efor e, t he val u e o f the benef i tr ece i ved w oul d be t he s ame r egar dl es s of th e v a lu e o f

th e b ri b e .” U

. S. S. G

. § 2C 1. 1 cmt
. n. 3. B eca us e the Sent enci ng G ui del i nes c o mm e n t a r y“ i s a k i n t o a n a g e n c y ’ s i n t e rp r e t a t i o n o f i t s o wn l egi s l at i ve rules[, ] ” w e w i l l gi ve the appl i cat i on not es “contr ol l i ng w eight ” unl es s t he comm ent ary“vi ol at e[s ] t he C ons t i tuti on ora fe der al s t atut e[] ” or“i s pl ai nl yerr oneous or i ncons i s t entw i t h t he r egul at i on. ” St i ns on v. U ni t ed Stat es , 508 U

. S

. 3 6 , 4 5 (19 9 3 ) (qu o tat ion s an d cit ati o n s o m itted).

B. T he L an ders A pproach L i ani di s t akes i s s u e w i t h tw o as pect s of the D i s t r i ct Cou rt ’ s ap pl i cat i on of L an ders in c a lc u la tin g “ b e n e f it r e c e iv e d .” Fi r s t , L i ani di s as s er t s t hat , underourdeci s i on i n P ena , 268 F. 3d 21 5, t he p roper m easurem ent of “ben efi t recei ved ” i s the gross r evenue les s l egi t i m at e cos t s of the SM A contr act s , w hi ch L i ani di s s ugges t s i s s l i ght l y di s t i nctfr om t he L an ders appr oach. Second, L i ani di s ar gues t hat , even f ol l ow i ng L an ders , t he D istri ct C o u rt erred in ref u sing to inclu d e h er an d h er h u sb an d ’s s a l a r i e s a n d D MS o v e r h e a d a s d i r e c tc o s t s o f t h e S MA co n tr ac ts. T h e G o v ern m en t m aintains that the D istri ct C o u rt ’s anal y s i s i s s ound.13 1. A lth o u g h th is C o u rt h a s a d d re ss e d th e sc o p e o f “ b e n e f it re c e iv e d ,” o r “ n e t v a lu e ,” in so m e in sta n c e s, w e h a v e y e t to defi ne the ca l cul at i on of “be nefi tr ece i ved” i n a ca s e w her e, as here, t he co ntr actun derl y i ng th e b riberyi s l egal. W e fi rs t exami ned “ne tval ue” i n U ni t ed S tat es v. Schw ei t

z er , w her e a defe ndantbr i bed a publ i c off i ci al to obt ai n confi dent i al i nform at i on hel d by t he S oci al Secur i t yA dm i ni s t r at i on. 5 F. 3d 44, 45 ( 3d C i r . 1993)

. T her e, w e hel d t hat t he “bene fi tr ece i ved” i s “the mar ketval ue of the i n fo rm at i on s ecur ed for[the defendant ’ s ] cl i ent
. ” I d. at47. W e dec l i ned t o s ubt r actthe val ue of the br i be i n cal cul at i ng “bene fi tr ece i ved” be caus e the “conc eptof ‘ netval ue r ece i ved’ has nothi ng t o do w i t h the expens e i ncurr ed byt he w r ongdoeri n obt ai ni ng the netval ue r ece i ved. ” I

d. T h is , w e c o n ti n u ed , “is clea r fro m the N o te’s in str u c ti o n th a t th e v a lu e o f th e b rib e is n o t to b e d e d u c ted in cal cul at i ng t he ‘ net val ue. ’ ” I d. (r e f e re n c in g U .S .S .G . § 2 C 1 .1 c m t. n.3 (“ D o n o t d e d u c t th e v a lu e o f th e b rib e itse lf

in co m p u ti n g the v alue o f th e be n ef itrec eive d o r t o b e re ce ived

. ”)). W e ext ended Schw ei t

z eri n P ena , w hi ch, l i ke Schw ei t z er and unl i ke the i ns t antcas e, conce r ned an i l l egal under l y i ng tra n sa c tio n : th e d e f

e n d a n t p o lice o f

f ice r a c c e p ted b rib e s in re tu r n f o r p e rm itt in g ill e g a l g a m b lin g m a c h in e s to o p e ra te w ith o u t in te rf

e re n c e . P ena , 268 F. 3d at 216. I n cal cul at i ng t he “bene fi tr ece i ved, ” w e r efus ed t o s ubtr act oper at i on cos t s w hen th e tra n sa c tio n w a s illeg a l: “th e c o n c e p t o f n e tti n g o u t c o sts to arr i ve atpr ofi ti s i nappr opr i at e underthe G ui del i nes s ect i on w hen t he tr ans act i ons ar e ent i r el yi l l egi t i m at e. ” I d. a t2 1 9

. We e x p r e s s l yd e c l i n e d t o f

o l l o w U n itedS ta tes v . Sa

p o zn ik , w h ere14 t he Seventh C i r cui t , i n another cas e i nvol vi ng i l l egal gambl i ng, r emanded forr e- s ent enci ng beca us e t he gover nm ent had nots et for th evi dence re g ar di ng t he cos t s of the i l l egal ent erpr i s e, w hi ch, acc or di ng t o t he S event h C i r cui t , pr event ed the c a lc u la tio n o f

n e t v a lu e . I

d. ( ci t i ng Sa

p o zn ik , 161 F

. 3 d 1 117, 1119- 20 ( 7t h C i r . 1998) )

. W e expl ai ned i n concl us i on thatthe

“‘ netval ue’ of the ‘ b enefi t ’ r ece i ved does notm ean ‘ net pr ocee ds

. ’ R ather , i t m eans benef i t r ece i ved aft er net t i ng outthe v a lu e o f w h a t- if a n yth in g -o f le g itim a te v a lu e , w a s p ro v id e d .” I d. at 221. W e found t hat t her e w as “no s uch val ue” i n t hatcas e. I d. L i ani di s hones i n on t he P ena p h ra s e “ le g itim a te v a lu e .” H o w e v e r, c o n tr a ry to L ia n id is ’s c h a ra c te ri z a tio n , P ena does not sta n d f o r th e p ro p o s it io n th a t “n e t v a lu e ” is n e c e ss a rily cal c ul a t e d b ys ub t r a c t i ng a l l “ l e gi t i mat e ” c os t s fr om gr oss re v e n u e . R a th e r, P ena hel d thati ti s i nappr opr i at e t o s ubtr act t he cost s of i l l egal t r ans act i ons i n cal cul at i ng “net val ue. ” Si nce t he P ena c o u rt d id n o t g iv e m e a n in g f u l d isc u ss io n to th e c o sts of l egal t r ans act i ons , nor t o w hether anydi ffe r ent i at i on betw een di r ectand i ndi r ectcos t s s houl d exi s t , t he pr eci s e cal cul at i on of “netval ue” unde r§ 2C 1. 1 ( b ) ( 2 ) when t he under l y i ng t r ans act i on is le g a l is still, a t th e v e rylea st, a n o p e n iss u e f o r th is C o u rt. W e ca n l oo k t o ours i s t erci r cui t s forgui dance

. T he sem i nal cas e i s L an ders , the F ifth C ir cu itd ec isi o n ap p li ed h ere by t he D i s t r i ctC our t
. Si m i l art o the i ns t antcas e, t he def endant i n L an ders m ade c as h br i bes t o obt ai n favorab le contr act s for the c o m p an y h e re p rese n ted. 68 F

. 3 d at 88 3

. T h e d istri ct co u rt c a lcu late d “ n e t v a lu e ” b ysu b tra c tin g th e c o sts o f th e g o o d s s o ld f ro m th e g ro s s v a lu e o f

th e c o n tr a c ts
. I

d. a t 8 8 4 -8 5 . O n a p p e a l,T he Fi fth C i r cui tr ej e c t e dth e d e f e n d a n t ’ s c o nt ent i on t hat 5 “netval ue” i s s y n onym ous w i t h “netpr ofi t s ”: “I f the S e n ten c in g C o m m iss io n w a n ted c o u rts to u se a ‘n e t p ro f it’ fi gur e, pr es um abl yi tw oul d have e m pl oy ed thatt erm . ” L an ders , 68 F. 3d at885. T he court al s o hel d thatt he Sent enci ng C om m i ssi on had i m pli ci t l y rej ect ed the conce pt of “n etprofi t s”

“ b yn o tin g th a t o n e typ e o f d ire c t co sts , b rib e s, is n o t d e d u c tib le fr om gr os s pr ofi t s . ” I

d. 15 t he def endantar gued thatt he di s t r i ct co ur ts houl d have su b tra c te d b o th th e c o st o f th e g o o d s s o ld a n d a sh a re o f h is c o m p a n y ’s o v e rh e a d f

ro m th e c o n t r a c t p ri c e . I d. at884. I n a w e ll-re a so n e d o p in io n , the F if th C irc u it a g re e d w ith re g a rd s to t he cos tof t he goods s ol d, but not w i t h r egar ds t o the overhead. I d. at886. T o s t ar t , t he Fi fth C i r cui tdet erm i ned that t he us e of the a d j e c t i v e “ n e t ” b e f

o r e “ v a l u e , ” a s wel l a s t h e e x a mpl e s i n t he § 2C 1. 1 appl i cat i on not es , “i m pl i es t hats om e cos t s s hou ld be deduct ed ” in t he ca l cul at i on of “be nefi tr ece i ved. ” I d. at884. T h e c o u rt th e n d re w a lin e b e tw e e n “ d ire c t” c o sts , w h ich it h e ld w e re d e d u c tib le, a n d “ in d ire c t” c o sts , w h ich it h e ld w e re n o t. 5 I d. at88 4 -86

. T he court ’ s r at i onal e w as t w o- fol d. Fi r s t , t he cour tanal ogi zed “ i ndi r ectcos t s ” t o the bri be i t s el f, w hi ch appl i cat i on not e 3 of § 2C1. 1 sta t es i s nots ubtr act ed i n the cal cul at i on of “ne tval ue”: “The r at i onal e forr efus i ng t o deductthe amount o f a b rib e f

ro m g ro ss v a lu e a p p lies e q u a llyto i ndi r ectcos t s . L i ke a br i be, i ndi r ect cos t s have no16 im p a c t o n th e h a rm c a u se d b yth e ill e g a l co n d u c t. T h is is tru e w h ethe r on e c o n side rs th e p ec u n iary ben efi tto th e bri bing part yor the p ecun i aryl oss t o a compet i t or . Forboth par t i es , t he bene fi tof an addi t i onal contr acti s m eas ur ed bygr os s r evenue m in u s d ire c t co sts . B yd e f in iti o n , ind ire c t co sts d o n o t a f f e c t th a t v a lu e .” Id

. at88 5. S econ d, t he cou rtheld that excl ud i ng “i nd i rectcost s” i s cons i s t entw i t h t he G ui del i nes ’ gener al goal of ac hie vi ng r eas onabl e uni form i t y i n s ent enci ng beca us e “[ a] l l ow i ng a w r ongdoerto d educti ndi r ectcos t s w oul d r es ul ti n di ffe r i ng c u l p a b i l i t y n o to n l yf

o rs i mi l a ra c t s , b u ta l s o f o rth e v e r ys a me act
. ” I d. T he courtpr ovi ded a hypot het i cal as an exa m pl e:

“ T a k e f o re x a mp l e a c a s e i n wh i c h two defe ndant s br i be the s ame gove r nm entoffi ci al for the s am e c o n tr ac t. If in d ir ec t cos ts w ere deduct i bl e, t he def

endant s coul d r ece i ve di ffe r ent s ent ence s i f one of them w or ked fora company w ith h ig h e r i n d ir e c t c o s ts .” I d. at886. I n concl us i on, the co u r tcal cul at ed “ne tval ue” by su b tr ac ti n g the co sts o f th e go o d s so ld, b u t n o t the c o m p a n y ’s o v e rh e a d

. I

d. L an ders has notfa ll en on dea f ea r s . T he C our t s of A ppeal s t hathave a ddr es s ed thi s i s s ue – t h e S econd, Seventh, and El eventh C i r cui t s – have c i t ed L an ders w ith a p p ro v a l. See U ni t ed Stat es v. G l i ck , 1 4 2 F

. 3 d 5 2 0 , 5 2 5 (2d C ir

. 1 9 9 8 ) ( “ In cal cul at i ng t he amountof ‘ i m pr oper b en efi t [] ’ [underA ppl i cat i on not e 4 of U

. S. S. G

. § 2E 5. 1, w hi ch conc erns 6 br i beryaff

ect i ng an empl oy ee be nefi tpl an, di r ect s cour t s t o the com m ent aryof § 2C 1. 1 i n det erm i ni ng “val ue of the i m pr oper b e n e f it to th e p a y e r.” A ppl i cat i on not e 2 of U

. S

. S

. G

. § 2B 4. 1, w hi ch appl i es 7 in ca ses o f co m m erc ial b ri b ery , d ir ec ts c o u rt s to the co m m en tary of § 2C 1. 1 i n det erm i ni ng “val ue of t he i m pr operbenef i tt o be c o n f e rr e d .” 17 § 2E 5. 1 (b)( 2) ] onl ydi r ectcos t s , noti ndi r ectcos t s , s houl d be 6 su b tra c ted f

ro m th e g ro ss v a lu e re c e iv e d .”); Sa p o zn ik , 161 F. 3d at 1119 ( a g r e e i n g t h a tf i x e d c o s t s s h o u l d b e i n c l u d e d i n n et v alue b u t f

in d ing itu n clea r w h ethe r th e c o sts at i ssu e w ere in d e e d f ix e d ); U ni t ed Stat es v. D eVegt er , 439 F. 3d 1299, 1304 ( 11t h C i r . 2006) ( “W e agr ee w i t h the Fi fth C i r cui t ’ s appr oach w h ich su b tra c ts d ire c t co sts , b u t n o t in d ire c t c o sts , fr o m p ro f its to d eterm ine th e n et i m p rop er b en ef it[u n d er § 2 B 4

. 1 (b)(1 )]. ”). 7 See al s o C ohen , 171 F. 3d at803 ( ci t i ng Lan de rs g en era ll y ); U ni t ed Stat es v. Leon , 2 F. Supp. 2d 592, 596 ( D

. N

. J

. 1998) ( “I hol d t hatonl y‘ di r ectcos t s ’ ar e deduc t i bl e i n cal cul at i ng the a m o u n t o f

t h e b e n e f

it c o n f e rr e d [ u n d e r § 2 B 4 .1 (b )( 1 )]

. . . . In d ire c t c o sts a re n o t d e d u c tib le.” ). W e a g re e th a t th e F if th C i r cui t ’ s r eas oni ng i s s ound: i ndi r ectcos t s , l i ke br i bes , do not i m pact the h arm caus ed byt he br i bery , and al l ow i ng the d e d u c tio n o f

in d ire c t co sts w o u ld f o ste r in c o n sis ten c yin s ent enci ng. A ccor di ngl y , w e w i l l adoptthe L an ders ap p roach and s ubt r actonl ydi r ectcos t s , and noti ndi r ectcos t s , w hen ca lculati n g “n et va lue” u n d er § 2 C 1

. 1 (b)(2 ).W e a d d ress this lat ter i n co rrect st atem en t of law m o re 8 f u lly in S e c tio n C , i nfr a . 18 2. L i ani di s al s o chal l enges t he D i s t r i ctC our t ’ s appl i cat i on of L an ders

. L i a n i d i s a s s e r t s t h a t b o t h t h e o v e r h e a d o f th e D MS off i ce, w hich L i anidi s al l eges on l yserviced the S M A con t ract s, a n d h e ra n d h e r h u s b a n d ’ s r e a s o n a b l e s a l a r i e s u n d e rt h e S MA contr act s ar e di r ect cos t s of t he SM A contr act s . I n r es pons e, t he G overnm entar gues t hati tw oul d be m i s l eadi ng t o cl ai m t hatone hundr ed per centof the D M S over head c an be a tt ri but ed t o t he SM A contr act s and thatL i ani di s ’ s and herhus band’ s salarie s mu s tb e i n c l u d e d i n “ b e n e f i tr e c e i v e d ” a s a ma t t e ro f l a w. 8 W e hol d att he out s etthat , al thoug h iti s the G overnm ent ’ s bur den t o s how “netval ue, ” P ena , 268 F. 3d at 2 2 0 , the d ef

en d an t b ea rs th e b u rde n o f p rod u cing the n ec essa ry document s . T o hol d otherw i s e w o u ld, i n pr act i ce, pr eventthe G overnm entfr om m eet i ng i t s bur den of pr oof. I n appl y i ng t he L an d ers ru le, w e w ill lo o k to th e F if th C i r c u i t ’ s s o u n d d e f

i n i t i o n s o f “ d i r e c t ” a n d “ i n d i r e c t ” c o s t s . We h o ld tha t “direc t” co sts are

“ a ll v a ria b le c o sts th a t ca n b e sp e c if ica lly id e n tifie d a s co sts o f p e rf o rm in g a c o n tra c t. T h is m ig h t in c lu d e , fo r e x a m p le, tra n sp o rta tio n c o sts f o r th e g o o d s in q u e stio n . T h u s, v a r ia b le o v e rh e a d c o sts th a t ca n n o t e a silyb e id e n tifie d to19 a sp e c if ic c o n tra c t ar e n o t d ire c t co sts . T h is defi ni t i on di ffe r s fr om t he acc ount i ng t erm ‘ di r ect cos t s ’ i n t hati texcl udes t hos e var i abl e cos t s t hat c a n n o t r e a d ily b e a p p o rt io n e d to th e c o n tr a c t.” L an ders , 68 F. 3d at884 n. 2. “I ndi r ect ” or “fi xed” cos t s ar e, on t he otherhand, “the cos t s i ncurr ed i ndepende nt l y of output
. For exam ple, rentand deb tob l i gati on s ar e cost s a b u sin e ss in c u rs n o m a tter h o w m a n y c o n tra c ts it rec eive s. F o r th e m o st pa rt , o v erh ea d co sts are f ix e d c o sts . T h e m a rg in a l in c re a se in v a ria b le overhead c os t s fr om a w r ongful l yobt ai ned contr act i s nor m al l ys o d e m in im is thatacc ount i ng f o r t h e m d u ri n g s e n tenc ing w o u ld b e im p ra c tic a l.” I d. at885 n. 3. Put s ucci nct l y , w hether a cost i s di r ectori ndi r ect d e p e n d s o n w h e th e r it ca n b e e a si ly attrib u ted to th e sp e c if ic contr actati s s ue. H ere , th e D istri ct C o u rt , af ter sum m arizing L ianid is’ s pr opos ed addi t i onal di r ectcos t s , m er el y concl uded w i t hout e x p la n a tio n , “ I d o n o t f

in d th a t th a t is d ir e c t c o s t.” (A p p . a t 1 5 .) Be c a u s e t h e Co u r td i d n o t e n g a g e i n t h e f o r e g o i n g a n a l y s i s , we w i l l r emand fort he D ist r i ctC our tt o cons i derw hetherany p o rt ion o f th e D M S o v erh ea d o r L ianid is’ s an d h er h u sb an d ’s sal ari es can b e easi l yat t ri bu t ed to sol el ythe S M A con t ract s.20 C . T he Sal ary T heory L ianid is al so arg u es o n ap p ea l th at th e D istri ct C o u rt err ed i n bas i ng i t s cal cul at i on of “be nefi tr ece i ved” on he rand her h u s b a n d ’ s s a l a r i e s . Acc o r d i n g t o Li a n i d i s , th e p r oper m eas ur eme n t o f “be nefi tr ece i ved” or“netval ue” unde r § 2 C 1 .1 (b )(2 ) is th e g ro ss re v e n u e m in u s le g iti m a te c o sts to D M S u n d e r th e S M A c o n tra c ts, n o t th e s a la r y p a id to L ian id is orherhus band. T he G overnm entdi s agr ees . A ssert i ng t hat L ian id is’s b e n e f

it c a m e in tw o f

o rm s – c o m p a n yp ro f

it as w e ll as her a nd herhus band’ s s al ar i es – the G overnm entcont ends t hat the cal cul at i on of “be nefi tr ece i ved” “ s houl d notchange d e p e n d in g o n w h e th e r a b u sin e ss o w n e r w h o u lti m a telyw ill r e c e i v e a l l of t h e c o mp a n y ’ s p r o f i t , c h o o s e s t o d e s i g n a t e s o me of th at p r ofi tas s al ary . ” ( A ppel l ee’ s B r . at18. ) I n r es pons e, L ian id is a rg u e s th a t th is “ o rd in a r y lan g u a g e a p p ro a c h ” to “b en ef it ” is i n ap p rop ria te u n d er the G u idelines

. (A p p ell an t’ s B r. a t 2 2 .) W e mustagr ee w i t h L i ani di s . T he D i s t r i ct C our t ’ s us e of L ian idi s’ s and h er husban d’s s al ari es as a proxyfor “ben ef it r ece i ved” runs contr aryt o t he G ui del i nes comm ent aryand our ow n pr ece denti n C ohen , 171 F. 3d 796. E xampl e 2 of U

. S. S. G

. § 2C 1. 1, appl icat i on not e 3 cl ar i fi es t he pr operm eas ur ementof “bene fi t r ece i ved” i n cas es w her e br i beryi s us ed t o pr ocu re cont r act s . T he pert i nent l ang uag e i s as fol l ow s:See n o te 7 , supra . 9 21 “ (2 ) A $ 1 5 0 ,0 0 0 c o n tra c t o n w h ich $ 2 0 ,0 0 0 p ro f it w as m ade w as aw arde d i n r eturn fora br i be; the v a lu e o f th e b e n e f

it r e c e iv e d is $ 2 0 ,0 0 0 .” U .S .S .G . § 2 C 1 .1 c m t. n .3 (2 0 0 8 ). T h e e x a m p le c lea rlyd ire c ts cour t s t o cons i dert he p rofi tm ade on the i l l egal l yobt ai ned contr act
. A l t hough t he exa m pl e does notexpr es s l ydi s al l ow t he us e of s al ar i es pai d unders uch contr act s , w e m u stgi ve “contr ol l i ng w ei ght ” t o the not e’ s s ugges t ed use of contr act p ro f it. See St i ns on , 508 U

. S. at45. O uropi ni on i n C ohen confi r m s thi s r eadi ng of § 2C 1. 1( b) ( 2)

. I n C ohen , a w hol es al e meatdi s t r i but i on sa les m a n w a s f

o u n d g u iltyo f

m a il fra u d b a se d o n h is par t i ci pat i on i n a companybr i bi ng s cheme: he r ece i ved $500 a w ee k in cash fro m the co m p an y , in ad d it ion to h is r eg u lar salary pay check , i n exch a ng e fo rdi s tr i bu t i ng the co m pan y ’s kickback s. 171 F. 3d at799- 800. L i ke t he i ns t ant cas e, t he par t i es di s agr eed ats ent enci ng overt he corr ecti nt erpr et at i on of “i m pr oper benef i t ” under U

. S. S. G

. § 2B 4. 1. I d. at802. T he G overnm ent 9 ar gued thatt he phr as e re fer s t o the netval ue gai ned byt he companyas a r es ul tof the defenda nt ’ s ki ckbac ks ; t he def endant ar gued thatt he phr as e r efe r s t o t he moneypocket ed byt he d e f e n d a n t h im s e lf

. I

d. a t 8 0 2 -0 3

. T h e d istric t co u rt a g re e d w ith t h e d e f e n d a n t , b u twe r e v e r s e d

. Ci t i n g e x a mp l e 2 o f U. S

. S

. G. § 2 C 1 .1 , ap p lica tio n n o te 3 , w e h e ld th a t “‘ im p ro p e r b e n e f it’ r efe r s t o t he netval ue ac crui ng t o t he ent i t yon w hos e beha l f the i ndi vi dual pai d t he br i be. ” I d. a t8 0 3

. Ac c o r d i n g l y , weT he di s s entw oul d hol d t hat “net benef i t ” i ncl udes the 10 s al ar i es pai d t o L i ani d is a n d herhus band i n par tbeca us e a s ent enci ng j udge w oul d be unabl e t o di s cern w hethera company ow nerli ke Li ani di s w as hi di ng companypr ofi tthr ough t he paym entof exc es s i ve s al ar i es . W e do not s h are t hi s conce r n. R egar dl es s , w e ar e notfr ee t o di s r egar d t he § 2C 1. 1 appl i cat i on not es , w hi ch di r ectus t o det erm i ne pr ofi tand w hi ch have “contr ol l i ng w ei gh t , ” s i m pl ybeca us e w e conc l ude that c o m p lia n c e w ith th e n o te s w ill b e o n e ro u s . See S ti ns on , 508 22 r emanded t he ca s e t o t he di s t r i ctcour tt o r e- cal cul at e “i m pr oper benef i t ” w i t h i ns t ruct i ons t o examine the company ’ s al l eged pr ofi ton t he $10 mi l l i on w or t h o f m eatpur chas ed fr om the c o m p a n ya s a re s u lt o f

th e b ri b e s . I

d. at803- 04. T he i ns t antcas e pre s ent s t he same i s s ue. Si m i l art o t he sa les m a n w h o d istrib u ted k ick b a c k s to e n c o u ra g e c u sto m e rs to pu rchase hi s com pan y ’s m eat , L i anidi s gave W oo ds i l l egal cash paym ent s t o obt ai n FA A contr act s for D M S. L i ani di s cont ends th a t, u n d er C ohen , t h e “ b e n e f i tr e c e i v e d ” i s t h e g r o s s r e v enue m in u s c o sts a c c ru in g to D M S . T h e G o v e rn m e n t, i n c o n tra st, ar gues not onl y t hat “bene fi t r ece i ved” r efe r s t o t he m oneyt hat a c c ru e d to L ian id is a s a n in d iv id u a l, bu t als o th a t “b e n e f it r ece i v ed ” i ncl udes L i ani di s ’ s s al ary . B ound as w e ar e by C ohen , w e cannotacc eptt he G overnm ent ’ s ar gum ent
. T he

“ b e n e f it rec e iv e d ” u n d e r § 2 C 1 .1 (b )(2 ) i s n o t th e sa lar yp a id to L ian id is an d h e r hu sb a n d , f o r w h ich sh e a n d h e r h u sb a n d leg a lly w or ke d a n d whi c h th e Gov e r n me n td o e s n o td i s p u t e was re a so n a b le, bu t ra th e r th e “ n e t v a lu e ” re c e iv e d b y D M S its e lf un der the S M A con t ract s. 10U

. S. at45. T h e G o v e rn m e n t as k s th a t w e a f f irm o n a ltern a te 11 gr ou n d s bas ed on i t s ar gum entthatt he “be nefi t
. . . t o be r ece i ved” byL i ani di s undert he SM S contr act w as betw een $1, 000, 000 and $2, 500, 000. B eca us e the D i s t r i ctC our tdi d not e n g a g e in th e n e c e ss a ryf a c tf in d in g , w e d e c lin e to re a c h th is 23 T hi s i nt erpr et at i on of § 2C 1. 1( b) ( 2) m akes s ens e. B as i ng a ca l cul ati o n o f “benefi tr ece i ved” on a s al arypai d underan i l l egal l yobt ai n contr acti s bot h over

- and under

- i ncl us i ve. T he us e of s al aryi s over - i ncl us i ve bec aus e Li ani di s and herhus band gav e t heir l abo r, no t j ust a bri be, i n ex chan ge fo r theirsal ari es. T he us e of s al aryi s under

- i ncl u si ve bec aus e Li ani di s and her h u sb a n d , as o w n e rs o f D M S , d id n o t d e p e n d o n th e ir sa lar ies to recei ve b enef

i t s und er the S M A con t ract s. In su m m a ry , w e h o ld th a t th e D istric t C o u rt e rre d in f in d in g th a t L ian id is h a d b e tw e e n $ 1 ,0 0 0 ,0 0 0 a n d $ 2 ,5 0 0 ,0 0 0 in “bene fi t r ece i ved” under § 2C 1. 1( b) ( 2) bas ed on L i ani di s ’ s and her husb and ’s sal ari es. I V. T o r ei t er at e, w e hol d thatt he pr opercal cul at i on of “bene fi tr ece i ved” unde rU

. S. S. G

. § 2C 1. 1( b) ( 2) i s the netval ue, m i nus di r ectcos t s , acc rui ng t o t he ent i t yon w hos e beha l f the defe ndant pai d t he br i be. W e w i l l vaca t e L i ani di s ’ s sent ence and r emand t o t he D i s tr i ct C our t for r e- s ent enci ng i n acc or dance w i t h t hi s s t andar d. 11iss u e . It i s n o t o u r ro le a s a n a p p e lla te c o u r t to in v e stig a te L ianid is’ s inten t, the e x tent to w h ich L ianid is’s b ri b es w ere connec t ed t o the S M S cont r act , ort he SM S contr act ’ s val ue. See I ngers ol l

- R and F i nanci alC or p. v. A nders on , 921 F. 2d 497, 5 0 4 (3d C ir

. 1 9 9 0 ) (“T h is co u rtis no t a fa ctfind ing tr ibu n al. ”). 24H A R D I M A N , J

. , di s s ent i ng. I agr ee w i t h t he M aj or i t y ’ s adopt i on of the L an ders t est to in terp re t U S S G § 2 C 1 .1 (b )(2 ). I lik e w ise a g re e th a t L ian id is b o re th e b u rd e n o f

p ro d u c in g th e e v id e n c e n e c e ss a ryto d e ter m in e th e n a tu re a n d a m o u n t o f h e r co sts th a t w e re d ire c tly at t r i but abl e t o per form i ng w or k pr ocur ed bythe br i be. U nl i ke m ycol l eague s , how ever , I w oul d aff i r m L i ani di s ’ s j udgm entof sen tenc e f

o r tw o ind ep en d en t r ea so n s. F ir st, the D istri ct C o u rt d i d n o tc l e a r l ye r ri n d e t e r mi n i n g wh i c h c o s t s i n c u r r e d b yDM S w er e di rec tl yat t r i but abl e t o i t s i l l

- got t en contr act s . Second, b e c a u se D M S w a s a c lo se ly -h e ld b u sin e ss a n d L ian id is w a s its Pr es i dent , t he D i s t r i ct C our tdi d notcl ear l yerrw hen i thel d t hat th e p o rtio n s o f

th e sa lar ies L ian id is a n d h e r h u s b a n d p a id t hemsel ves t hatw er e att r i but abl e t o thei rw or k on the i l l

- got t en con t ract s const i tuted the “b enef i trecei ved ” from her bri bes. T he D i s t r i ct C our t expr es s l yadopt ed the L an ders tes t in c a lcu latin g th e n e t v a lu e o f th e b e n e f

it rec e iv e d , an d h e ld L i ani d is’ s pr opos ed deduc t i ons w er e notdi r ectcos t s . T he M a jo r it yc o n c lu d e s th a t th e D istric t C o u rt re a c h e d th is concl us i on “w i t houtexpl anat i on” and “ di d notengage ” i n a m or e el abor at e ana l y s i s of the L an ders tes t. B u t th e M a jo rity does not endea vor t o expl ai n how t he D i s t r i ctC our t ’ s fi ndi ng of fac t , cu rt though i tw as , cons t i tut ed “c l earerr or . ” See U ni t ed Sta t es v. C ohen , 1 7 1 F .3 d 7 9 6 , 8 0 2 (3 d C ir. 1 9 9 9 ). L ian id is bor e t he bur den of pr oduci ng evi dence t o s uppor thercl ai m that so m e c o sts w e re d e d u c tib le b e c a u se th e yw e re d ire c tly at t r i but abl e t o t he i l l

- got t en contr act s . T he r ecor d i ndi cat es that she pre se n t ed the D i stri ctC ou rtw i t h a laund ryl i stof b usi ness exp enses and request ed a ded ucti on for each. S everal of these expens es w er e cl as s i c “fi xed cos t s , ” s uch as r entand upkee p ofL i ani di s pr offe r ed evi dence t hr ough heracc ount antt hat 1 D M S p aid $ 2 , 1 2 8 , 2 0 7 in w ag es to su b co n tr ac tors fo r w o rk per form ed on the FA A contr act s at issue her e. T hi s does not chan ge the G uidel i nes range fo un d b ythe D i stri ctC ou rt, h o w e v e r, b e c a u se th e n e t b e n e f it re c e iv e d b yth e c o m p a n ystill w oul d have e xcee ded $1 mi l l i on. -2- D M S’ s offi ce s pace , and L i ani di s offe r ed l i t t l e orno evi dence connec t i n g them t o t he FA A contr act s s he pr ocur ed thr ough br i bery . A bs ents uch proof , I fi nd no “cl ear err or ” i n the D i s t r i ct C o u rt’s c o n c lu sio n th a t th o se c o sts w e re n o t d e d u c tib le in d eterm ining the “ b en ef

itrec eive d ” u n d er § 2 C 1

. 1 (b)(2 ). 1
E ven i f Li ani di s had carr i ed herbur den of s how i ng w hi ch cost s w ere di rect l y at t ri bu t able t o her il l -got t en F A A con t ract s, I w o u ld a f

f irm th e ju d g m e n t o f

th e D istric t C o u r t b e c a u se it corr ect l y found t hat t he $1, 046, 823. 80 i n w ages L i ani di s and her husb an d pai d t hemsel ves forw or k theyper form ed on the c o n tra c ts p ro c u re d th ro u g h b rib e ryw e re p a rt o f th e “ n e t b e n e f

it” re c e iv e d a s a re su lt o f

h e r b rib e . In th is re g a rd , I d isa g re e w ith th e M a jo rity ’s tre a tm e n t o f D M S a s “ th e e n tityo n w h o se b e h a lf th e d e f e n d a n t p a id th e b rib e .” B e c a u se D M S w a s a c lo se ly -h e ld co rpo rati o n an d L ianid is, as it s P reside n t, co n tr o ll ed h er sa lary and herhus band’ s s al ary , I w oul d hol d thatL i ani di s w as t he ben efi ci aryof the bri bes. I n hol di ng ot herw i s e, t he M aj or i t yr el i es on U ni t ed Stat es v. C ohen , 171 F. 3d 796 ( 3d C i r . 1999)

. I n C ohen , an empl oy ee o b tai n ed contr act s forhi s empl oy erthr ough br i bery , and w e concl uded thatt he empl oy erw as “the enti t yon w hos e beha l f”T he M aj or i t y ’ s anal y s i s of A ppl i cat i on N ot e 2( 2) w or ks 2 fi ne i n t he typi cal cas e w her e the per s on w ho co m m i t s the b ri b e ry d o e s s o o n b e h a lf o f a c o rp o ra tio n th a t e m p lo y s h im . I f in d A p p lica tio n N o te 2 (2 ) f a c tu a llyin a p p o site to c lo se ly -h e ld compani es l i ke D M S forthe r eas ons s t at ed her ei n. -3- th e b ri b e w a s p a id

. Id

. at803. T hi s concl us i on m ade pe r fec t s ens e bec aus e C ohen w as notan ow neroroffi cerof the company . T hat i s deci dedl y not t he cas e her e. L i ani di s ow ned an d co n tr o ll ed D M S , sh e w as the b en ef ici aryo f th e c o m p an y ’s profi t s, and she determ i ned her ow n an d h er husban d’s s al ari es. T hi s contr ol enab le d L i ani di s t o payher s el f as an empl oy ee ( s al ary ) or as a s har ehol der( di s t r i but i on of pr ofi t s )

. U nderthe ru le e sta b lish e d b yth e M a jo rity , the o w n e r o f a c lo se ly -h e ld b u sin e ss w h o p a y s h e rse lf a h a n d so m e sa lar y , as d id L ian id is, is s u bj e c t t o a l o w e rG u i d e l i n e s r a n g e t h a n a n o w n e rw h o p a ys h e rse lf a m o d e st s a lar yd u rin g th e y e a r a n d p a y s o u t th e p ro f its of the companyaty earend , ev en though bot h ow ner s end up w i t h t he s ame a m ount of m oney . E ven w or s e, an empl oy ee s uch a s C o h e n

— w h o th ro u g h b rib e ryp ro c u re s a c o n tra c t th a t re su lts in g re a t f in a n c ial b e n e f

it t o h is em p lo y e r bu t little o r n o b e n e f it t o hi m s el f— w oul d be s ubj ect t o a hi gherG ui del i nes r ange than L i ani di s , w ho chos e t o payher s el f and her h u s band over $ 1 , 0 0 0 , 0 0 0 g e n e r a t e d b y h e ro w n b r i b e r y. 2 For t h e f o r e g o i n g r e a s o n s , I wou l d h o l d t h a t when an empl oy ee pa y s br i bes t o w i n contr act s fora corpor at i on thats he ow ns and contr ol s , t he empl oy ee he r s el f i s t he bene fi ci aryof the br i be, and the amountof th e b en ef i ti s equal t o the s um of ( 1) t he por t i on of hers al aryat t r i but abl e t o t he br i be- i nducedI r ecogni ze thats al ar i es ar e notpur e p rof i tt o an 3 empl oy ee be caus e w or ki ng i m po s es a l aborcos ton t he empl oy ee. A s a mat t erof theory , t he netbenef i tacc rui ng t o an e m p lo y e e w o u ld b e th e a m o u n t b yw h ich h e r sa lar ye x c e e d s th is cos t
. I n pr act i ce, how ever , I can di s cern no w ayfora s ent enci ng c o u rt to d e ter m in e th is c o st. M o re o v e r, I a m lo a th e to p e rm it a d e d u c tio n f

o r th e v a lu e o f

lab o r th a t o n e h a d th e o p p o rtu n ityto per form onl yt hr ough br i bery . E ven i f s uch a de t erm inat i on w e re f e a sib le, th e e m p lo y e e w o u ld still b e re q u ire d to su b m it e v id e n c e d e m o n stra tin g th a t h e r la b o r c o sts w e re d ire c tly at t r i but abl e t o the i l l

- got t en contr act
. B eca us e Li ani di s has m ade no e ffortt o do so her e, I vi ew the ent i r e port i on of the s al aries s he pai d t o her s el f and he rhus band as partof the net ben efi tshe recei ved from her bri bes. T he D i s t r i ctC our tdi d notadd t h ese am ount s t ogether 4 i n cal cul at i ng t he bene fi tr ece i ved, i ns t ead tr ea ti ng them as al t ern ati v e m eas ur es of the bene fi t
. T hi s w as t he appr oach advoca t ed byt he governm ent , w hi ch w as b o u n d byi t s pl ea agr eement w i t h L i ani di s nott o ar gue foran off ens e l evel hi gher t han 17, and as a r es ul tcoul d n o t argue t hatt he val ue of the benef i tr ece i ved w as gr eat erthan $1 mi l l i on t o $2. 5 m i l l i on. -4- contr act and ( 2) t he pro fit s t he corpor at i on earned fr om t hat

3 c o n tra c t (a f

ter p a y in g h e r sa lar y ). B e c a u se th e D istric t C o u rt d id no tcl earl yerri n calcul at i ng eith e r of these am ou nts , I 4 re sp e c tf u llyd iss e n t.