Court Opinion

ID: 9942172
Source: CourtListenerOpinion
Date Created: 2024-02-20 17:00:52.167657+00
Date Added: 2024-06-11T13:47:48.165877
License: Public Domain

USCA11 Case: 23-11137    Document: 35-1     Date Filed: 02/20/2024   Page: 1 of 9

                                                  [DO NOT PUBLISH]
                                   In the
                United States Court of Appeals
                        For the Eleventh Circuit

                          ____________________

                                No. 23-11137
                          Non-Argument Calendar
                          ____________________

       UNITED STATES OF AMERICA,
                                                      Plaintiﬀ-Appellee,
       versus
       JOHN M. THOMAS,
       a.k.a. John Thomas,

                                                  Defendant-Appellant.

                          ____________________

                 Appeal from the United States District Court
                     for the Northern District of Florida
                 D.C. Docket No. 3:21-cr-00040-MCR-HTC-1
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       2                     Opinion of the Court                  23-11137

                           ____________________

       Before WILSON, NEWSOM, and ANDERSON, Circuit Judges
       PER CURIAM:
              John Thomas appeals from his 168-month sentence for 16
       counts of wire fraud, 4 counts of money laundering, and 4 counts
       of money laundering to conceal proceeds of unlawful activity. On
       appeal, Thomas raises two main arguments: (1) the district court
       plainly violated Federal Rule of Criminal Procedure 11(b)(3) by ac-
       cepting his guilty plea to Counts 21 through 24 because there was
       an insufficient factual basis to support them and (2) the district
       court procedurally erred by applying the two-level sophisticated-
       means enhancement to his guideline range under U.S.S.G.
       § 2B1.1(b)(10)(C) because he did not use sophisticated means to
       perpetrate his insurance-fraud scheme. After careful review of the
       record, we AFFIRM.
                                           I.
              Between April 22, 2013, and February 16, 2021, Thomas de-
       frauded 69 of his clients at Thomas Insurance LLC in Pensacola,
       Florida, through premium diversion. Thomas collected insurance
       premiums from his clients and falsely represented to them that he
       purchased insurance policies. Thomas provided his victims with
       fraudulent insurance documents indicating the fake policies were
       in effect. He also falsely represented to one victim that he had ob-
       tained an annuity by providing a fraudulent contract and portfolio
       summary. Several of Thomas’s victims were his personal friends.
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       23-11137                  Opinion of the Court                                3

       After Hurricane Sally hit the Gulf Coast in 2020, several of
       Thomas’s victims learned they were uninsured as they sought to
       file claims for hurricane damage to their property.
               Through premium diversion, Thomas received payments of
       at least $4.8 million from his victims and his fraud caused at least
       $2.2 million in unpaid claims caused by hurricane, fire, and liability
       losses. When one victim attempted to submit a claim, Thomas di-
       rected the victim to send photos and damage estimates to a fake
       Colorado company he created: “JSSK Risk Advisors, LLC.”
       Thomas pretended to be an insurance adjuster named “Scott Pow-
       rie” at JSSK Risk Advisors to “deny” the victim’s claim.
              Thomas was indicted with 16 counts of wire fraud in viola-
       tion of 18 U.S.C. § § 1343, 2. He also faced 4 counts of money laun-
       dering in violation of 18 U.S.C. § 1957. 1 Finally, Thomas was in-
       dicted with 4 counts of money laundering to conceal proceeds of
       unlawful activity in violation of 18 U.S.C. § 1956(a)(1)(B)(i). These
       violations involved the following four transactions: (1) $50,000
       transfer from his bank account to his Family Trust bank account,
       then transferred to purchase a Lexus; (2) $278,730.14 transfer from
       his bank account to his Family Trust bank account, then transferred
       to purchase a condominium on Pensacola Beach, Florida;
       (3) $30,469.80 check from his bank account to exchange for 20 one-

       1 These counts related to (1) $100,000 to restore a Jeep; (2) an African Safari;

       (3) real estate in Park City, Utah; and (4) a metal roof for his home in Gulf
       Breeze, Florida.
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       4                      Opinion of the Court                  23-11137

       ounce gold coins; (4) $97,557.19 transfer from his bank account to
       an E*Trade brokerage account.
             Thomas pled guilty to all 24 counts after the magistrate
       judge conducted a colloquy with Thomas to ensure that he was
       pleading guilty knowingly and voluntarily. The magistrate judge
       recommended that the court accept Thomas’s plea, and noting no
       timely objections, the district court accepted the guilty plea.
               At his sentencing hearing, Thomas’s counsel objected to the
       sophisticated means enhancement, among other things. Counsel
       described Thomas’s fraud as “incredibly simple” and stated
       Thomas’s ability to go undetected for almost eight years stemmed
       from Thomas’s special skill and the vulnerability of his victims, not
       sophistication. The court overruled all of Thomas’s objections, in-
       cluding for sophisticated means. Based on Thomas’s PSI, the dis-
       trict court determined Thomas’s guideline range to be 168 to 210
       months in prison. Two victims testiﬁed, Thomas spoke, and the
       court explained its assessment of the § 3553 factors and sentenced
       Thomas to 168 months in prison followed by three years of super-
       vised release. Thomas timely appealed.
                                           II.
               When a defendant alleges Rule 11 violations on appeal ra-
       ther than before the district court, we review for plain error. United
       States v. Puentes-Hurtado, 794 F.3d 1278, 1285 (11th Cir. 2015). “To
       prevail under the plain error standard, an appellant must show:
       (1) an error occurred; (2) the error was plain; (3) it aﬀected his sub-
       stantial rights; and (4) it seriously aﬀected the fairness of the
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       23-11137               Opinion of the Court                          5

       judicial proceedings.” United States v. Ramirez-Flores, 743 F.3d 816,
       822 (11th Cir. 2014).
              Rule 11(b)(3) of the Federal Rules of Criminal Procedure re-
       quires courts to “determine that there is a factual basis” for a guilty
       plea “[b]efore entering judgment.” In United States v. Majors, we
       outlined that an 18 U.S.C. § 1956(a)(1)(B)(i) violation requires the
       following:
              (1) that [the defendant] conducted or attempted to
              conduct a ﬁnancial transaction; (2) that the transac-
              tion involved the proceeds of a statutorily speciﬁed
              unlawful activity; (3) that [the defendant] knew the
              proceeds were from some form of illegal activity; and
              (4) that [the defendant] knew a purpose of the trans-
              action was to conceal or disguise the nature, location,
              source, ownership, or control of the proceeds.
       196 F.3d 1206, 1212 (11th Cir. 1999). Personal payments made with
       “previously laundered proceeds” violate § 1956 when “designed to
       conceal the nature or source of the money.” United States v. Mag-
       luta, 418 F.3d 1166, 1176 (11th Cir. 2005). “Evidence that a defend-
       ant converted funds into a form that is more diﬃcult to trace, easier
       to hide, or less suspicious,” such as exchanging cash for jewelry, can
       support a violation of § 1956. United States v. Naranjo, 634 F.3d 1198,
       1210 (11th Cir. 2011). Regardless of whether the source of the
       transacted money was easily discoverable, “the statute requires
       only that proceeds be concealed, not that they be concealed well.”
       Id. Several types of evidence can support an intent to conceal:
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       6                       Opinion of the Court                    23-11137

       defendants’ statements about their intent, secretive transactions,
       structures that attempt to avoid attention, irregular transactions,
       concealing owners through third parties, series of odd movements
       leading to transactions, or expert testimony. United States v. Garcia-
       Emanuel, 14 F.3d 1469, 1475–76 (11th Cir. 1994).
              But we have concluded that transferring money between ac-
       counts that each bore the defendant’s name did not violate
       § 1956(a)(1)(B)(i) because the defendant did not receive “any mar-
       ginal increase in secrecy” through these movements and used the
       minimum possible number of transactions. United States v. Blank-
       enship, 382 F.3d 1110, 1128–29 (11th Cir. 2004). We also found in-
       suﬃcient evidence of concealment where the defendant trans-
       ferred money from accounts located in the United States to one
       belonging to his mother located in Luxembourg.2 United States v.
       Johnson, 440 F.3d 1286, 1291, 1293 (11th Cir. 2006) (per curiam).
              Here, the district court did not plainly violate Rule 11(b)(3)
       by ﬁnding that there was a suﬃcient factual basis to accept
       Thomas’s guilty plea as to Count 23. That count involved a trans-
       action to convert money from a bank account into gold coins. This
       ﬁnancial transaction involved the proceeds of an unlawful activity,
       which Thomas knew. Per Naranjo, a form that is “more diﬃcult to
       trace” or “easier to hide” can support a § 1956 conviction. 634 F.3d
       at 1210. The gold coins would be easier to hide than other assets

       2 In Johnson, we reviewed a conviction under 18 U.S.C. § 1956(a)(2)(B)(i),

       which involves international transactions but otherwise had identical lan-
       guage to § 1956(a)(1)(B)(i). 440 F.3d at 1290.
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       23-11137               Opinion of the Court                        7

       and moving gold coins would be harder to trace than moving
       money from a bank account. Violating § 1956 “requires only that
       the proceeds be concealed, not that they be concealed well.” Id. at
       1210. Under our precedent, the district court did not clearly err in
       ﬁnding a factual basis for Count 23.
              Although the district court violated Rule 11(b)(3) with re-
       spect to Count 24, the error did not aﬀect Thomas’s substantial
       rights. Count 24 related to the transfer of funds between a personal
       bank account and a brokerage account, both of which had
       Thomas’s name on them. We have previously held that merely
       moving money between accounts that both belong to a defendant
       does not constitute a violation of § 1956. See Blankenship, 382 F.3d
       at 1119. Whether there was suﬃcient factual basis to support a
       guilty plea on Counts 21 and 22 presents a closer call. Both counts
       relate to funds moved from one personal bank account to a trust
       account and then used to purchase a Lexus (Count 21) and a con-
       dominium (Count 22). Both transactions used proceeds of an un-
       lawful activity. Still, they seem more analogous to personal pay-
       ments than concealment, especially given the single transfer, to a
       family trust, before making purchases
              Nonetheless, this does not call for reversal under plain error
       review because Thomas has not shown that the error impacted his
       substantial rights. Even if he could show that he would not have
       pled guilty, changing the outcome of his convictions on Counts 21,
       22, and 24 would not impact the enhancement for violating § 1956,
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       8                      Opinion of the Court                  23-11137

       which only requires one conviction under that statute. See U.S.S.G.
       § 2S1.1(b)(2)(B).
                                          III.
              We review the application of the sophisticated-means en-
       hancement for clear error. United States v. Feaster, 798 F.3d 1374,
       1380 (11th Cir. 2015). We will not reverse the district court’s appli-
       cation of the enhancement “‘unless we are left with a deﬁnite and
       ﬁrm conviction that a mistake has been committed.’” Id. (quoting
       United States v. Ghertler, 605 F.3d 1256, 1267 (11th Cir. 2010)).
              An oﬀense that “involved sophisticated means and the de-
       fendant intentionally engaged in or caused the conduct constitut-
       ing sophisticated means” should result in a two-level increase.
       U.S.S.G. § 2B1.1(b)(10)(C). The commentary outlines that the so-
       phisticated means enhancement applies to “especially complex or
       especially intricate oﬀense conduct pertaining to the execution or
       concealment of an oﬀense.” Id. § 2B1.1, cmt. n.9(B). Examples in-
       clude locating various telemarketing oﬃces in diﬀerent jurisdic-
       tions or using “ﬁctitious entities, corporate shells, or oﬀshore ﬁnan-
       cial accounts” to “hid[e] assets or transactions.” Id. Courts evalu-
       ate conduct in its entirety rather than each individual step. Feaster,
       798 F.3d at 1380. Regardless of its elements, “the scheme itself may
       be designed in a sophisticated way that makes it unlikely to be de-
       tected, allowing it to continue for an extended period and to im-
       pose larger losses.” Id. at 1381. Even schemes with a sole partici-
       pant can employ sophisticated means. Id.
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       23-11137                 Opinion of the Court                            9

              The district court did not clearly err in applying the sophis-
       ticated means enhancement. We evaluate Thomas’s fraudulent
       scheme in its totality. See Feaster, 798 F.3d at 1380. Although indi-
       vidual fraudulent insurance documents may seem “simple,”
       Thomas made them in a way that created a sophisticated scheme.
       Thomas created fraudulent insurance documents and fabricated an
       annuity portfolio. In addition, Thomas made up an email address
       for his alias “Scott Powrie” at the fake “JSSK Risk Advisors, LLC”
       to deny one of his victim’s insurance claims.
              Our decision does not change solely because Thomas acted
       alone. Feaster shows that individual actors can receive the sophisti-
       cated means enhancement. Id. at 1381. On his own, Thomas man-
       aged to conceal his fraud for over seven years and cause millions of
       dollars in losses. In light of our precedent and Thomas’s actions,
       the district court did not clearly err in applying the two-level so-
       phisticated-means enhancement under § 2B1.1(b)(10)(C). 3
              For the reasons discussed above, the decision of the district
       court is AFFIRMED.

       3 The government also argues that we could affirm based in United States v.

       Keene, 470 F.3d 1347 (11th Cir. 2006) because the district court would have
       given Thomas the same sentence even if the enhancement did not apply. But
       because the district court did not err in applying the enhancement, we need
       not consider whether the claimed error was harmless under Keene.