Opinion ID: 212690
Heading Depth: 3
Heading Rank: 2

Heading: Sophisticated-Means Enhancement

Text: Crosgrove received a two-level increase under U.S.S.G. § 2B1.1(b)(9) for the use of sophisticated means in committing the crime. The application notes to § 2B1.1(b)(9) identify hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts as conduct that ordinarily indicates sophisticated means. Although Crosgrove acknowledges that off-shore companies and shells were involved in this conspiracy, he argues that he should not have received a sophisticated-means enhancement because he was not involved with the creation of any shell companies or with off-shore activities. This argument misunderstands the guidelines definition of relevant conduct. Guidelines § 1B1.3(a)(1)(B) defines relevant conduct for jointly undertaken criminal activity as all reasonably foreseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity. Therefore, a sophisticated-means enhancement could be applied to Crosgrove even if his role in the conspiracy did not involve the use of sophisticated means so long as the use of such means was reasonably foreseeable to him. The sentencing court, however, concluded that Crosgrove himself had used sophisticated means, both by creating the John Thomas alias and by participating in the creation of false insurance certificates and other fraudulent correspondence. The court rooted its finding in the guidelines language and in case law dealing with sophisticated-means enhancements applied to crimes other than money laundering. These cases support the conclusion that the repeated use of fictitious identities can justify a sophisticated means enhancement, particularly when the identity is reinforced through other deceptive practices, such as instructing employees in handling calls directed to the fictitious party. See United States v. Kopietz, 126 Fed.Appx. 708, 710-11 (6th Cir.2005) (finding no clear error in district court's application of sophisticated-means enhancement to defendant who had aided in filing fifteen tax returns under fraudulent identities); United States v. Lewis, 76 Fed.Appx. 47, 48 (6th Cir.2003) (finding sophisticated-means enhancement appropriate for defendant who fraudulently obtained merchandise through the use of an alias, fictitious companies, and fictitious references provided by his own employees). Crosgrove's argument that he did not participate in the creation of shells or otherwise participate in offshore activities is therefore irrelevant unless he can also refute the finding that the use of a pseudonym and the issuance of fraudulent insurance certificates is not an appropriate basis for a sophisticated-means enhancement. Crosgrove makes no such argument, but instead focuses on the things he did not do during the conspiracy. But even this argument fails, as trial evidence showed that Crosgrove knew Midwest was an offshore company and repeatedly represented himself as Midwest's general counsel. Therefore, while he did not assist in the creation of Midwest, his role in the conspiracy was certainly not isolated from the use of offshore entities, and the district court did not commit error in applying a sophisticated-means enhancement.