Opinion ID: 204040
Heading Depth: 3
Heading Rank: 2

Heading: Lugo Enhancements

Text: Lugo separately argues that the court's factual findings with respect to his sentencing enhancements for (1) using sophisticated means, (2) deriving more than $1,000,000 from a financial institution, and (3) organizing or leading an extensive criminal activity, were clearly erroneous. As background, at Lugo's sentencing, the district court assessed a base offense level of seven, pursuant to U.S.S.G. §§ 2S1.1(a)(1) & 2B1.1(a)(1), and then the following enhancements: an 18-level loss enhancement under U.S.S.G. § 2B1.1(b)(1), as already discussed; a two-level enhancement under U.S.S.G. § 2S1.1(b)(2)(B), because Lugo was convicted under 18 U.S.C. § 1956; a two-level enhancement under U.S.S.G. § 3B1.3, because Lugo abused a position of trust; a two-level enhancement under U.S.S.G. § 2B1.1(b)(9)(C), because Lugo used sophisticated means in committing the offense; a two-level enhancement under U.S.S.G. § 2B1.1(b)(14)(A), because Lugo derived more than $1,000,000 in gross receipts from a financial institution[ ]; and a four-level enhancement under U.S.S.G. § 3B1.1(a), because Lugo was an organizer or leader of an extensive criminal activity involving five or more participants. Lugo objected to the enhancements for using sophisticated means, deriving more than $1,000,000 from a financial institution, and organizing or leading an extensive criminal activity. The district court overruled his objections. As Lugo preserved his claims, we review the district court's factual findings supporting these enhancements for clear error.
As to using sophisticated means, Lugo used several Union Accounts (the Infrastructure Account, the Administrative Account, and the Welfare Account) to conceal and move millions of dollars. The record also shows that Lugo filed fraudulent tax returns and that he participated in doctoring minutes of meetings. These are sufficient sophisticated means to support the enhancement. See United States v. Edelmann, 458 F.3d 791, 816 (8th Cir. 2006) (affirming where the defendant created and used numerous false documents, including multiple years of federal tax returns, fake loan documents, and misleading bank statements; even assuming the component parts of the scheme were not complex, the total scheme was sophisticated). The only things that Lugo raises in response are the same claims that support his sufficiency claims, which we have already rejected.
As to deriving more than $1,000,000 from a financial institution, Lugo argues that the Plan does not qualify as a financial institution. However, U.S.S.G. § 2B1.1 cmt. n. 1 defines a financial institution as the following: Financial institution includes any ... union or employee pension fund; any health, medical, or hospital insurance association;... and any similar entity, whether or not insured by the federal government. Union or employee pension fund and any health, medical, or hospital insurance association, primarily include large pension funds that serve many persons ... and associations that undertake to provide pension, disability, or other benefits (e.g., medical or hospitalization insurance) to large numbers of persons. The Health Plan clearly falls within this definition. We thus reject Lugo's claim.
As to his organizer or leader enhancement under U.S.S.G. § 3B1.1(a), Lugo argues that the district court clearly erred in imposing the enhancement because, he claims, there was no evidence that Lugo managed participants. See United States v. Cali, 87 F.3d 571, 578 (1st Cir.1996) (noting that, [i]n the past, we have required some `degree of control or organizational authority over others' to support a section 3B1.1(b) adjustment). Lugo, in particular, argues that the district court clearly erred when it found at sentencing that Lugo recruit[ed] the other Defendants to participate in the scheme, as all of the Defendants were elected to their positions. But such a finding is not clearly erroneous given that the evidence showed his extensive coordination of the various activities engaged in by the Defendants, such as falsifying loan documents, doctoring minutes, and bamboozling the OIC concerning the administrative services contract. Thus, his coordination supports a reasonable inference that he recruited the others to participate. In any event, his involvement in all of these activities supports the district court's ultimate finding that [f]rankly, this [crime] would not have happened [but] for the fact that [Lugo] was there. Finally, Lugo seizes on the district court's statement that [t]here is no leader here, but the district court made this statement in response to defense counsel's statement that the Defendants were elected by the leadership.  (Emphasis added). Read in context, the statement only corrects defense counsel's statement. Accordingly, the district court did not err in imposing the enhancement.