Opinion ID: 4200472
Heading Depth: 3
Heading Rank: 2

Heading: Endangerment of Financial Security

Text: The district court also applied a four-level sentence enhancement because it found Melton’s crimes “substantially endangered the solvency or financial security of an organization that, at any time during the offense, was a publicly traded company.” U.S.S.G. § 2B1.1(b)(16)(B)(ii)(I). Melton claims ThermoEnergy’s financial hardship was not a result of his own conduct because almost every witness testified ThermoEnergy constantly had revenue problems. According to Cline, payroll checks frequently bounced, and ThermoEnergy went without paying executives for several months because ThermoEnergy needed funding from potential investors. While the government agrees there “[c]ertainly” were other factors affecting the financial security of ThermoEnergy, Melton’s crimes left ThermoEnergy with an “unforeseen $2,000,000 liability, and the public effects of a crooked CFO on [ThermoEnergy’s] reputation.” Cossey, who retired from ThermoEnergy in 2011, stated that to his knowledge ThermoEnergy now operated only as a “virtual company” with no employees. Arthur Reynolds, who was interim chief executive officer of ThermoEnergy from August 3, 2009 until November 2010, testified, “key investors were not willing to put more money in until [the payroll tax liability] matter was clarified and resolved.” Though Melton was not solely responsible for ThermoEnergy’s financial hardship, given the effect of his crimes on the security and future of the organization, the district court did not err in applying this enhancement. See United States v. Wheeler, 412 F.3d 979, 981 (8th Cir. 2005) (upholding the application of an enhancement for endangering the financial security of a corporation where the defendant’s conduct “adversely affected the company’s viability, profitability, and ability to staff the business” and nearly forced the corporation into bankruptcy (internal quotation marks omitted)). -19-