Opinion ID: 619159
Heading Depth: 2
Heading Rank: 2

Heading: Role and Sophistication Enhancements

Text: Mr. Snow also contends the district court erred in applying two-level enhancements under § 3B1.1(c) for being an organizer or leader of the mortgage fraud scheme and § 2B1.1(b)(9)(C) for use of sophisticated means to perpetrate the scheme. In support, Mr. Snow continues to argue he did not command or control anyone else involved in the scheme for the purpose of warranting a two-level increase or participate in conduct significantly more complex or intricate for the basis of warranting a two-level increase for committing an offense by sophisticated means. Instead, he contends he controlled and led only himself and his offense conduct exhibited no enhanced level of sophistication.
We begin with the two-level enhancement for Mr. Snow's role in the conspiracy and mortgage scheme. We review for clear error the district court's finding that the defendant acted as a leader or organizer for purposes of § 3B1.1. James, 592 F.3d at 1113 (quotation marks omitted). Under this standard, we will not reverse the district court's finding unless, on the entire evidence, we are left with the definite and firm conviction that a mistake has been committed. Id. (quotation marks omitted). Guidelines § 3B1.1(c) recommends a two-level increase in a defendant's offense level if he was an organizer, leader, manager, or supervisor in the criminal activity. These roles are disjunctive, meaning a defendant need only qualify for one of these roles to qualify for an increase in his offense level. See United States v. Almaraz, 306 F.3d 1031, 1040 (10th Cir.2002). In determining if a defendant qualifies as an organizer or leader, the Guidelines recommend the sentencing court consider: the exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others. There can, of course, be more than one person who qualifies as a leader or organizer of a criminal association or conspiracy. U.S.S.G. § 3B1.1 cmt. n. 4. These criteria are advisory, and while Mr. Snow contends the evidence did not show each of these criteria were met, including entitlement to more money than any other participants, it is clear the commentary criteria are disjunctive, so not all must be met to warrant an increase. In addition to the criteria cited in the commentary to § 3B1.1, we have held functioning as a leader requires control over underlings, particularly in the form of recruitment and direction, while no control is necessary to qualify as an organizer. See United States v. Wardell, 591 F.3d 1279, 1304 (10th Cir.2009), cert. denied, ___ U.S. ___, 132 S.Ct. 430, ___ L.Ed.2d ___ (2011). Instead, to qualify as an organizer, a defendant need only devise a criminal scheme providing the wherewithal to accomplish the criminal objective, and coordinat[e] and oversee[] the implementation of the conspiracy even though the defendant may not have any hierarchical control over the other participants. Id. Here, the district court expressly considered the criteria in application note 4 to Guidelines § 3B1.1 to conclude Mr. Snow qualified as a leader or organizer. In so doing, it found no fraudulent loan transactions or conspiracy would have existed without Mr. Snow's participation. We agree. Our review of the record on appeal, including the entirety of the transcripts provided, shows Mr. Snow orchestrated or otherwise directed the mortgage-fraud scheme when he taught his co-conspirators how to conduct and conceal the scheme; inflated the price and negotiated the sale of the houses he built; coached others on how to submit false information and documentation; recruited another homebuilding company for the purpose of furthering the fraudulent scheme; and convinced home buyers to purchase homes for artificially-high prices by promising and then providing them cash after closing and furnishing his own funds to provide them with money for down payments, closing costs, debt payoff, and fraudulent inflation of their bank accounts for the purpose of obtaining loan approvals. These circumstances establish Mr. Snow was an organizer for the purposes of § 3B1.1(c) even if, as he contends, he controlled and led only himself and therefore did not qualify as a leader. Indeed, Mr. Snow met much of the criteria relied on by the district court in the commentary to U.S.S.G. § 3B1.1 for the purpose of finding him to be an organizer, including exercise of decision-making authority, direct and active participation in the commission of the offense, and a heightened degree of participation in planning or organizing the offense. Moreover, he provided the wherewithal to accomplish the mortgage-fraud scheme by providing the cash and knowledge needed to perpetrate it and coordinating and overseeing the implementation of the conspiracy, as demonstrated by his involvement in all stages of the scheme. Even if his son met many of these criteria as well, as previously noted more than one person may qualify as an organizer of a criminal conspiracy. Thus, Mr. Snow meets sufficient criteria to qualify him as an organizer of the mortgage-fraud scheme for the purpose of warranting a two-level offense enhancement under § 3B1.1(c), and we are not otherwise left with the definite and firm conviction a mistake has been committed for the purpose of reversing the district court's application of the enhancement. As a result, we need not determine if, as Mr. Snow contends, he did not qualify as a leader in the scheme perpetrated.
On appeal, Mr. Snow contests the district court's two-level increase in his offense level under § 2B1.1(b)(9)(C) for conduct through sophisticated means. When reviewing a district court's application of the Sentencing Guidelines, we review legal questions de novo and we review any factual findings for clear error, giving due deference to the district court's application of the [G]uidelines to the facts. United States v. Jones, 530 F.3d 1292, 1305 (10th Cir.2008). Guidelines [§] 2B1.1(b)(9)(C) provides for a two-level increase in the offense level of a defendant `[i]f . . . the offense . . . involved sophisticated means.' United States v. Weiss, 630 F.3d 1263, 1279 (10th Cir.2010). Its accompanying commentary explains that sophisticated means refers to an especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. U.S.S.G. § 2B1.1(b)(9)(C) cmt. n. 8(B) (emphasis added). We have also held that [t]he Guidelines do not require every step of the defendant's scheme to be particularly sophisticated; rather . . . the enhancement applies when the execution or concealment of a scheme, viewed as a whole, is `especially complex or especially intricate.' Weiss, 630 F.3d at 1279. In this case, Mr. Snow did not undertake to execute or conceal merely a single fraudulent transaction using false documentation but orchestrated a vast and complex fraud scheme in which he participated in over forty fraudulent mortgage-related transactions to defraud at least twelve different financial institutions. Evidence of the complexity of this scheme is demonstrated, not only by the lengths Mr. Snow took to execute it, but the actions he took to successfully conceal the scheme from the financial institutions and title companies involved, which included sufficient sophistication in the execution and concealment of the scheme to fool trained and experienced bank and closing personnel into approving over forty fraudulently-obtained home loans. The record is absolutely replete with instances of Mr. Snow successfully executing and concealing the scheme through especially complex conduct, included his providing, and directing others to provide, fraudulent documentation and information sufficient to fool those reviewing it; disbursing, and instructing others to disburse, funds below the currency transaction reporting threshold; procuring, or instructing others to procure, cashiers' checks to disguise the true source of the buyers' down payments; providing down payments, closing funds, and debt reduction for buyers to qualify for loans; circulating, or instructing his son to circulate, funds through his and his son's business and bank accounts to avoid detection; and teaching a loan originator how to create fictitious second mortgages to help qualify buyers and fool the title and financial institutions involved. For these reasons, the district court did not commit clear error in its factual findings nor err in its deferential application of § 2B1.1(b)(9)(C) to the facts in this case. Instead, it reasonably applied a two-level increase in Mr. Snow's offense level under § 2B1.1(b)(9)(C) for conduct by sophisticated means, which involved especially complex conduct in the scheme's execution as well as its concealment. See § 2B1.1(b)(9)(C) cmt. n. 8(B).