Opinion ID: 783752
Heading Depth: 1
Heading Rank: 5

Heading: Grouping Issues.

Text: 23 Chapter 3, Part D, of the Guidelines prescribes the method for determining the combined offense level when a defendant has been convicted of multiple offenses. Section 3D1.1(a) provides that the district court must group closely related counts following the rules in § 3D1.2, determine the offense level applicable to each group under § 3D1.3, and then determine the combined offense level by applying the rules in § 3D1.4. See United States v. O'Kane, 155 F.3d 969, 971 (8th Cir.1998). As previously explained, the district court grouped the mail fraud and structured transaction counts, declined to group the mail fraud and tax fraud counts, and imposed a one-level multi-group adjustment under § 3D1.4. Shevi argues the tax fraud counts should have been grouped with the other offenses. 3 24 Section 3D1.2 begins by declaring that [a]ll counts involving substantially the same harm shall be grouped.... The section then describes in subsections (a)-(d) the four situations in which [c]ounts involve substantially the same harm within the meaning of this rule. In this case, subsections (a) and (b) do not apply because Shevi's mail fraud and tax fraud have different victims — his creditors and niece and nephew on the one hand, and the United States Treasury on the other. See, e.g., United States v. Thayer, 201 F.3d 214, 225-26 (3d Cir.1999), cert. denied, 530 U.S. 1244, 120 S.Ct. 2691, 147 L.Ed.2d 963 (2000). Shevi argues that the tax fraud and mail fraud counts must be grouped under subsection § 3D1.2(c), which provides that offenses must be grouped [w]hen one of the counts embodies conduct that is treated as a specific offense characteristic in, or other adjustment to, the guideline applicable to another of the counts. He relies on United States v. Haltom, 113 F.3d 43, 46 (5th Cir.1997), where the court grouped a tax evasion offense and a mail fraud offense under § 3D1.2(c) in a case where the offense level for tax evasion was increased by 2 because [defendant's] unreported income was derived from ... the mail fraud alleged in count one. 25 A number of other circuits have declined to follow Haltom, instead concluding that tax fraud and mail fraud counts should not be grouped under § 3D1.2(c), even if the defendant received a two-level increase on the tax fraud count for failing to report income derived from the criminal mail fraud. See United States v. Peterson, 312 F.3d 1300, 1303-04 (10th Cir.2002), and cases cited. We need not address this conflict in the circuits because the offense level for Shevi's tax fraud counts was not increased based upon his conduct that was punished as mail fraud. Thus, the district court properly declined to group these counts under § 3D1.2(c). 26 That reduces the grouping issue to the fourth subsection, § 3D1.2(d), which requires the grouping of counts for which the offense level is determined largely on the basis of the total amount of harm or loss. 4 The Second Circuit held that grouping of tax fraud and mail fraud counts is proper under § 3D1.2(d) in United States v. Gordon, 291 F.3d 181, 192 (2d Cir.2002), cert. denied, 537 U.S. 1114, 123 S.Ct. 866, 154 L.Ed.2d 788 (2003). Other circuits disagree. See United States v. Lindsay, 184 F.3d 1138, 1142-43 (10th Cir.), cert. denied, 528 U.S. 981, 120 S.Ct. 438, 145 L.Ed.2d 343 (1999); United States v. Williams, 154 F.3d 655, 656-58 (6th Cir.1998), cert. denied, 525 U.S. 1113, 119 S.Ct. 889, 142 L.Ed.2d 788 (1999). When the counts at issue are governed by different offense guidelines, as in this case, the § 3D1.2(d) issue becomes difficult. The offense levels for Shevi's mail fraud and tax fraud offenses are both largely based on the amount of harm or loss. See U.S.S.G. §§ 2F1.1(a)-(b), 2T1.1, 2T4.1. But to be grouped under § 3D1.2(d), the offenses must also be of the same general type. § 3D1.2, comment. (n.6). Application Note 6 provides illustrations but does not define when offenses are of the same general type. 27 In United States v. Hildebrand, 152 F.3d 756, 763 (8th Cir.), cert. denied sub nom. Webb v. United States, 525 U.S. 1033, 119 S.Ct. 575, 142 L.Ed.2d 479 (1998), we rejected the government's contention that fraud and money laundering offenses should be grouped under § 3D1.2(d). Though the offense levels of both are largely based on the amount of harm or loss, money laundering offense levels are higher, so the effect of § 3D1.2(d) grouping would be to sentence the entire fraud loss at the higher money laundering offense levels, even if the entire fraud loss was not laundered. The same reasoning applies here, where the tax offense loss table in § 2T4.1 imposes higher offense levels than the mail fraud loss table in § 2F1.1(b). When the loss tables for two offenses punish the same amount of loss differently, the offenses are not of the same general type for purposes of § 3D1.2(d). Therefore, the district court correctly declined to group Shevi's mail fraud and tax fraud counts. 28 The judgment of the district court is reversed, and the case is remanded for further sentencing proceedings not inconsistent with this opinion.