Court Opinion

ID: 3192594
Source: CourtListenerOpinion
Date Created: 2016-04-08 19:00:48.780288+00
Date Added: 2024-06-11T07:39:08.200303
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 14-4790

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

           v.

THOMAS L. KIMMEL,

                Defendant - Appellant.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Greenville. James C. Dever III,
Chief District Judge. (4:13-cr-00057-D-1)

Argued:   March 24, 2016                    Decided:   April 8, 2016

Before MOTZ, GREGORY, and KEENAN, Circuit Judges.

Vacated and remanded by unpublished per curiam opinion.

ARGUED: Robert Earl Waters, OFFICE OF THE FEDERAL PUBLIC
DEFENDER, Raleigh, North Carolina, for Appellant.    Kristine L.
Fritz, OFFICE OF THE UNITED STATES ATTORNEY, Raleigh, North
Carolina, for Appellee.   ON BRIEF: Thomas P. McNamara, Federal
Public Defender, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Raleigh,
North Carolina, for Appellant. Thomas G. Walker, United States
Attorney, Jennifer P. May-Parker, Yvonne V. Watford-McKinney,
Assistant United States Attorneys, OFFICE OF THE UNITED STATES
ATTORNEY, Raleigh, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

     The    district    court    sentenced       Thomas   L.    Kimmel       to   264

months’    imprisonment    after    a    jury    convicted     him    on    multiple

counts relating to his participation in a Ponzi scheme.                            On

appeal, Kimmel challenges the three-level sentencing enhancement

he received for his role as a manager or supervisor of the

conspiracy.      For the reasons set forth within, we vacate and

remand for resentencing.

                                         I.

     In 2005, James Kirk invited Kimmel to join in a business

venture buying and selling used cars.                  Kirk incorporated the

portion    of   the   business   that     provided     in-house      financing     to

customers under the name Sure Line Acceptance Corporation (“Sure

Line”) and served as its Chief Executive Officer.                          Sure Line

raised additional funds for the business by offering investments

purportedly      secured   by      the       vehicle   titles     and       accounts

receivable.

     Kimmel, who had been conducting debt-counseling seminars at

churches throughout the country, became the principal fundraiser

for Sure Line by selling its securities to seminar attendees.

While promoting the notes, Kimmel made several false statements

regarding the degree of risk in the investment and his role at

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Sure    Line.         For   his    efforts,            Kimmel     earned    a    ten       percent

commission on all proceeds he generated for the company.

       Although       Kimmel      was       Sure       Line’s    top    sales        person,     he

conducted       his    seminars         through         his     own    business,        Faithful

Stewards.       As such, while Kimmel made several suggestions to

Kirk aimed at improving the company’s fundraising, he did not

make any decisions regarding the day-to-day operations of Sure

Line.    Kirk accepted Kimmel’s recommendations but testified at

trial that Kimmel neither sought nor accepted general authority

over Sure Line’s operations or employees.

       Sure   Line     began      as    a    legitimate         business,       but    became     a

fraudulent Ponzi scheme when the financial crisis halted used

car purchases and the company began using new investor money to

make    interest      payments         to    earlier         investors.         As    is    to   be

expected, this arrangement merely postponed the inevitable bust,

which   occurred       in   January         2012       and     resulted    in   over       sixteen

million dollars in economic loss.                       On August 21, 2013, a federal

grand jury indicted Kimmel on multiple counts related to his

involvement in the fraudulent scheme.

       While Kirk and other Sure Line employees pled guilty and

eventually      cooperated        with       the       Government,      Kimmel       elected     to

stand trial.          The jury convicted Kimmel on several counts of

conspiracy      to     commit      mail       and       wire    fraud     and    engaging        in

unlawful        monetary          transactions.                   In      the        presentence

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investigation report, the Probation Office recommended several

sentencing     enhancements,       including       a   four-level       increase    for

Kimmel’s   role   as    an   organizer        or   leader   of    the       conspiracy,

pursuant to U.S. Sentencing Guidelines Manual § 3B1.1(a) (U.S.

Sentencing Guidelines Comm’n 2012).                    Kimmel objected to this

enhancement at sentencing.

     The   district      court    found       that,    although       the    conspiracy

involved only four participants and perhaps implicated a fifth,

the scheme was certainly “extensive.”                  Kimmel does not challenge

before    us   this    threshold    finding,       necessary      to    support    the

§ 3B1.1 enhancement.         Next, the district court considered the

seven factors found in the commentary to § 3B1.1 that assist in

the evaluation of a defendant’s role in an offense.                            See id.

§ 3B1.1 cmt. n.4.        Weighing these factors, the court determined

that the facts proved at trial did not support a four-level

enhancement for organizers or leaders under § 3B1.1(a), but did

support    a   three-level       increase       applicable       to    managers     and

supervisors under § 3B1.1(b).             The court then sentenced Kimmel

to 264 months’ imprisonment, a term that reflects additional

enhancements and a downward variance.                  Kimmel noted this timely

appeal, challenging the three-level sentencing enhancement.

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                                           II.

       Guidelines        § 3B1.1(b)        provides         for         a        three-level

enhancement “[i]f the defendant was a manager or supervisor (but

not an organizer or leader) and the criminal activity involved

five   or   more    participants      or    was       otherwise    extensive.”           Id.

§ 3B1.1(b).        The commentary to the Guidelines explains that the

enhancement is appropriate only when the defendant was a manager

or supervisor “of one or more other participants,” as opposed to

“exercis[ing]        management    responsibility            over       the        property,

assets, or activities of a criminal organization.”                               Id. § 3B1.1

cmt.   n.2.        “A   ‘participant’      is     a    person     who       is    criminally

responsible for the commission of the offense, but need not have

been convicted.”         Id. § 3B1.1 cmt. n.1.             In accordance with the

Guidelines, we have long held that a defendant must have been a

“manager or supervisor of people” to warrant the enhancement.

United States v. Sayles, 296 F.3d 219, 226 (4th Cir. 2002).

       We   review      the   district          court’s    “essentially             factual”

determination that the defendant was a manager or supervisor for

clear error.        United States v. Steffen, 741 F.3d 411, 414 (4th

Cir. 2013).        Our review is not limited to the reasoning of the

district court, thus we will find clear error “only when, after

reviewing all the evidence, we are left with the definite and

firm conviction that a mistake has been committed.”                              Id. at 415

(internal quotation marks omitted).

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                                            III.

       Kimmel     argues       that   the   district      court    clearly       erred    in

concluding that he was a manager or supervisor of the conspiracy

because    he     did    not    exercise      any   control      over    other    people.

Based on our review of the record, we must agree.

       In its analysis of the § 3B1.1 factors, the district court

made several factual findings that we believe accurately reflect

the record evidence.             First, the court found that Kimmel “had a

specific role,” which was to “raise money for Sure Line.”                                The

court also found that Kimmel was “responsible for marketing the

program,”    served       as    its   “principal      fundraiser,”        and    received

“the second highest share of the fruits of the fraud.”                             On the

other     hand,    the     court      found    that    Kimmel     “did     not    recruit

accomplices       in     the    fraud,”       and   did    not    “exercise[]      formal

decision-making authority within Sure Line in terms of its day-

to-day operations.”

       These factual findings, and the Guidelines factors on which

they    bear,      certainly          demonstrate         that    Kimmel     played        a

significant role in the extensive fraudulent scheme.                            Yet these

facts do not establish that Kimmel ever managed or supervised

people, which is a necessary finding to support the enhancement.

See, e.g., Sayles, 296 F.3d at 226-27.                      Our independent review

of the record confirms that Kimmel, an important fundraiser, did

not exert control over any other participant in the scheme.

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       The only instances we have found in the record when Kimmel

arguably      influenced     another   participant   are   the   times   Kimmel

proposed changes to Sure Line’s fundraising operations to Kirk,

like creating a “spiritual board of advisors.”              But the district

court found that these interactions were mere “suggestions” that

Kimmel made “to better enable [Kimmel] to raise money for Sure

Line.”       Even though Kirk frequently accepted these unsolicited

recommendations, we agree with the district court that they are

best       understood   as   suggestions,    not   instances     where   Kimmel

managed or supervised a fellow participant.                Thus, we conclude

that the district court clearly erred when it enhanced Kimmel’s

sentence pursuant to § 3B1.1(b) without finding that he managed

or supervised people.         Kimmel must be resentenced. *

                                       IV.

       For the foregoing reasons, the judgment of the district

court is

                                                      VACATED AND REMANDED.

       *Because we vacate Kimmel’s sentence and remand for
resentencing, we need not decide whether the original sentence
was substantively unreasonable, as Kimmel contends.

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