Opinion ID: 221339
Heading Depth: 3
Heading Rank: 2

Heading: Enhancement for the Use of Sophisticated Means

Text: We review the district court’s application of the Guidelines for clear error. See United States v. Kraig, 99 F.3d 1361, 1371 (6th Cir. 1996). The district court determined that Samuels qualified for a two-level sentencing enhancement, pursuant to U.S.S.G. § 2B1.1(b)(9), for the use of sophisticated means. The Guidelines defines “sophisticated means” as: [E]specially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense. For example, in a telemarketing scheme, 18 Nos. 10-1103, 10-1843 locating the main office of the scheme in one jurisdiction but locating soliciting operations in another jurisdiction ordinarily indicates sophisticated means. Conduct such as hiding assets or transactions, or both, through the use of fictitious entities, corporate shells, or offshore financial accounts also ordinarily indicates sophisticated means. U.S.S.G. § 2B1.1 cmt. n.8 (2008). While Samuel acknowledges that “he arranged or ‘sponsored’ some of the [fraud] trips . . . purchased false identifications, recruited persons to go on the trip, scheduled the flights, and located the banks to hit,” he claims that the district court committed clear error in applying the enhancement to his sentence. (Samuels Br. at 2) Samuels argues that sophisticated means, if any, were only used in the commission of Count IV, for which no enhancement can be applied. The government responds that Samuels’ efforts to minimize the complexity of the operation by examining each aspect of the scheme piecemeal—e.g., booking airfares or locating bank branches—obscures the fact that the combination of all of these activities required extremely sophisticated planning. Therefore, as “Defendant’s objection asks the Court to focus on one aspect of the offense instead of the totality of the scheme, it should be overruled.” (Pl.’s Br. at 20.) Samuels is correct that the charged activities of Count IV cannot be used to enhance his sentence for Counts I through III. The Guideline addressing aggravated identity theft states: If a defendant was convicted of violating 18 U.S.C. § 1028A, the guidelines sentence is the term of imprisonment required by statute. Chapters Three (Adjustments) and Four (Criminal History and Livelihood) shall not apply to that count of the conviction. U.S.S.G. §2B1.6(a). There is no question that the district court did not directly apply any enhancement to the 24month sentence it imposed upon Samuels on Count IV. Instead, Samuels argues that, in applying 19 Nos. 10-1103, 10-1843 an enhancement to his sentences for Counts I through III, the district court used only the factual basis underlying Count IV. On the contrary, the district court found that “this situation involves a whole variety of sophisticated means and that go well beyond the Count IV, aggravated identity theft, which certainly involved sophisticated means.” (Samuels Sent. Tr. at 65.) The district court continued: [The conspirators] picked out locations across the country as opposed to concentrating all their efforts in one place. . . . and it’s probably one of the things that allowed the conspiracy to thrive as long as it did. And certainly sophisticated means include efforts taken not just to commit the offense but to conceal the offense as well. Another, it seems to me, obvious sophisticated means is the whole description of how Mr. Samuels handled proceeds by depositing it into an account of a daughter, not his own personal account, and then using increments that are below the reporting threshold of $10,000. That seems to me a well-known means among people who understand the banking system to conceal or at least slow down the path of law enforcement. And it’s happened here. I think the only reasonable inference is that it was part of an effort, successful for a while, to conceal what was going on. The third and certainly the most obvious sophisticated means, it seems to me, is the logistical planning involved. Flying in your own name with legal lawful documents is hard enough these days. To do it with false documents, to do it across the country, to coordinate the trips of multiple players, and to include housing and everything else that goes along with that, rental cars, this is a group of people whose logistical skills are quite remarkable, it seems to me, and that was necessary to conceal the fraud as long as it went on. (Id. at 66-67.) Each of these activities was charged under Counts I through III. Count II charged that the co-conspirators “traveled to the Western District of Michigan and other states where they used [counterfeit] documents to make fraudulent, in-person cash withdrawals of approximately $211,319 from the BOA accounts of those persons, resulting in a financial loss to BOA of approximately $174,585.” (Samuels PSR ¶ 5.) This kind of cross-jurisdictional conduct, for the purposes of 20 Nos. 10-1103, 10-1843 avoiding detection, is exactly the type of conduct described in the Guidelines definition of “sophisticated means.” See U.S.S.G. § 2B1.1 cmt. n.8 (2008). Count III charged that “defendants used the Internet to determine the addresses of BOA branches for the purpose of committing bank fraud and aggravated identity theft. They also used a GPS to assist in locating bank branches, lodging, and otherwise traveling as necessary to carry out the scheme.” (Id. ¶ 6.) This count addresses the complicated logistics involved in targeting the banks “to hit.” It also encompasses the sophistication required to target out-of-state banks in transition onto BOA systems, which the conspirators identified as being particularly vulnerable to their kind of fraud. (Samuels Sent. Tr. at 11-12.) Furthermore, Samuels’ structuring of deposits into his daughter’s bank account was an attempt to cover up not the crime of identity theft, but to cover up his participation in a bank fraud conspiracy, as charged under Counts I through III. This Court has held that such funneling of transactions through relatives in order to disguise the origin of funds is sufficient to support an enhancement for sophisticated means. See United States v. May, 568 F.3d 597, 607 (6th Cir. 2009) (citing United States v. Clear, 112 F. App’x 429, 431 (6th Cir. 2004)). Just as in United States v. Masters, “[w]hile each of the individual steps in the fraud scheme was not particularly sophisticated, it is the totality of the defendant’s conduct—the entire scheme—that the district court found was carried out using ‘sophisticated means.” 216 F. App’x 524, 527 (6th Cir. 2007). In determining that Samuels’ offense conduct under Counts I through III involved the use of sophisticated means, the district court did not commit clear error.