US v. Arthur Wei
Filing
PUBLISHED AUTHORED OPINION filed. Originating case number: 1:12-cr-00249-TDS-1. [999370927]. [13-4039]
Appeal: 13-4039
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PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-4039
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
ARTHUR SANFORD WEISS,
Defendant - Appellant.
Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro. Thomas D. Schroeder,
District Judge. (1:12-cr-00249-TDS-1)
Argued:
March 20, 2014
Decided:
June 6, 2014
Before NIEMEYER and DIAZ, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by published opinion. Senior Judge Hamilton wrote the
opinion, in which Judge Niemeyer and Judge Diaz joined.
ARGUED: Charles LeRoy White, II, Greensboro, North Carolina, for
Appellant.
Todd Alan Ellinwood, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Ripley Rand,
United States Attorney, Clifton T. Barrett, Assistant United
States
Attorney,
OFFICE
OF
THE
UNITED
STATES
ATTORNEY,
Greensboro, North Carolina, for Appellee.
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HAMILTON, Senior Circuit Judge:
On appeal, Arthur Weiss (Weiss) challenges his 185-month
sentence, following his plea of guilty to one count of wire
fraud, 18 U.S.C. § 1343, one count of money laundering, id. §
1957, one
count
of
making
a
false
statement
on
a
loan
application to a financial institution, the accounts of which
are insured by the Federal Deposit Insurance Corporation (FDIC),
id.
§ 1014,
internal
§
and
one
revenue
7212(a).
count
laws
of
of
corrupt
the
interference
United
States,
with
26
the
U.S.C.
We affirm.
I.
The following facts either underlie the counts to which
Weiss pled guilty or constitute relevant conduct for sentencing
purposes.
From sometime in 2003 until mid-2012, Arthur Weiss (Weiss)
owned and operated several professional employer organizations
in North Carolina.
A professional employer organization (PEO)
provides human resource functions, including payroll processing,
for companies through employee leasing agreements.
Under North
Carolina law, PEOs are required to be licensed and regulated by
the
North
Carolina
Professional
Department
Employer
of
Insurance.
Organization
§§ 58-89A-1 to 180.
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Act,
North
N.C.
Carolina
Gen.
Stat.
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During this time frame, Weiss falsely held himself out as a
Certified Public Accountant by using the initials “CPA” on his
letterhead,
on
his
business
(artweisscpa@aol.com).
cards,
and
in
his
email
address
The record also contains evidence that
Weiss provided a brochure to a potential client, whom he later
acquired as an actual client, outlining the services offered by
his PEO named Employee Alternatives, LLC (EA), including payroll
processing,
tax
insurance.
payroll
The
taxes,
responsibility
processes.”
Other
EA
Revenue
services,
EA
brochure
file
for
Service
securing
that
tax
returns
payroll
accuracy
244)
(internal
included
(IRS)
workers’
stated
the
(J.A.
services
and
and
compensation
“[w]e
deposit
your
and
assume
full
timeliness
quotation
of
marks
omitted).
preparation and filing of
Form 941
(Employer’s
those
Internal
Quarterly
Federal
Income Tax Return) and making deposits for federal unemployment
insurance.
which
can
In the EA brochure, Weiss listed himself as a CTA,
stand
for
either
“‘Certified
Tax
Accountant’”
or
“‘Chartered Tax Advisor,” and listed himself as an ATA, which
stands for “‘Accredited Tax Advisor.’”
Through
companies
his
hired
various
Weiss.
PEO
Id.
entities,
Weiss
at
collected
least
funds
twenty-two
from
client
companies to pay the wages of the companies’ respective leased
employees along with a fee for the payroll services.
Weiss then
deposited such funds into bank accounts he controlled.
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Weiss
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then
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instructed
calculate
third-party
the
withholdings.
applicable
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payroll
state
companies
and
to
federal
actually
income
tax
The third-party payroll companies either paid the
employees their net income directly or advised Weiss of the net
amounts due; thereafter Weiss would disburse the net paycheck
funds to the employees.
On many occasions, Weiss failed to pay
the
withholdings
state
entities
and
to
federal
the
IRS
and
relevant
deposited
state
with
revenue
his
PEO
agencies,
converting such funds to his own use.
Weiss also collected funds from his client companies to
secure
workers’
compensation
insurance
for
their
leased
employees, but failed to secure the level of coverage for which
he collected premiums.
He converted the excess premium payments
to his own use.
Weiss stipulated for sentencing purposes that the losses
attributable
to
him
totaled
$4,132,044.16
in
unpaid
federal
employment taxes, $260,839.00 in unpaid state employment taxes,
and
$559,663.02
in
unpaid
workers’
compensation
insurance
premiums.
Another Weiss scam involved a bank insured by the FDIC.
Over time, Weiss established a close banking relationship with
Branch
Bank
and
Trust
(BB&T).
From
2002
until
2008,
Weiss
submitted false federal income tax returns to BB&T reflecting
higher income figures for himself than he had actually reported
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to the IRS.
2004
and
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In reliance upon these misrepresentations, between
2008,
BB&T
approved
four
loans
to
Weiss,
totaling
$2,266,500.00, for the purchase of a lot and construction of a
home in Marion, North Carolina.
The home securing such loans
subsequently sold in bankruptcy proceedings for $1,350,000.00.
Weiss failed to report any of his illegally obtained income
to the IRS.
He stipulated that the illegal income he should
have declared on his federal income tax returns resulted in him
underpaying
personal
income
taxes
in
the
amount
of
$1,093,813.00.
Weiss used a portion of the proceeds from his employment
tax scheme to purchase expensive jewelry.
and
May
11,
2008,
Weiss
and
his
wife
Between May 3, 2008
traveled
to
Romania.
During the trip, Weiss falsely reported to his insurance carrier
that
four
pieces
of
jewelry
with
$129,900.00 were lost or stolen.
a
total
purchase
price
of
He subsequently received a
check, via the United States Postal Service, from his insurance
carrier,
for
$177,480.00.
the
appraised
value
of
such
jewelry--i.e.,
Law enforcement authorities subsequently located
the same four items of jewelry in Weiss’ home.
II.
The
presentence
report
(PSR)
calculated
Weiss’
total
offense level under the United States Sentencing Guidelines (the
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Guidelines or USSG) at 33 and his criminal history category at
III, resulting in an advisory sentencing range of 168 to 210
months’ imprisonment.
level
of
position
33
of
objected.
Of relevance on appeal, the total offense
included
trust,
a
2-level
pursuant
to
enhancement
USSG
§ 3B1.3,
for
abuse
of
a
to
which
Weiss
The district court overruled his objection.
Also of relevance on appeal, the total offense level of 33
set forth in the PSR included 20 levels for a loss of more than
$7,000,000.00,
but
§ 2B1.1(b)(1)(K).
less
than
$20,000,000.00.
See
USSG
Weiss objected to application of this loss
range, contending that he is only accountable for $6,050,000.00
in losses, thus placing him in the loss range of more than
$2,500,000.00, but less than $7,000,000.00.
This loss range
results in an 18 level increase in his offense level as opposed
to 20.
See USSG § 2B1.1(b)(1)(J).
The district court overruled
this objection also.
The district court found the total amount
of
to
loss
attributable
Weiss’
offense
conduct
and
relevant
conduct to be $7,140,339.18.
Ultimately, the district court determined Weiss’ advisory
sentencing range under the Guidelines to be 168 to 210 months’
imprisonment, and sentenced him to 185 months’ imprisonment.
On appeal, Weiss challenges the procedural reasonableness
of his sentence on the basis that the district court erred:
(1)
by increasing his offense level under the Guidelines by 2 levels
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pursuant USSG § 3B1.3 for abuse of a position of trust; (2) by
increasing his offense level under the Guidelines by 20 levels
pursuant to USSG § 2B1.1(b)(1)(K), instead of by only 18 levels
pursuant to USSG § 2B1.1(b)(1)(J); and (3) by failing sua sponte
to
appoint
sentencing.
various
experts
to
assist
in
his
defense
at
We address each of these assignments of error in
turn.
III.
USSG
§ 3B1.3
provides
for
a
2-level
enhancement
in
the
defendant’s offense level if the defendant “abused a position of
public or private trust . . . in a manner that significantly
facilitated
. . . .”
the
commission
USSG § 3B1.3.
or
concealment
of
the
offense
The applicable commentary identifies a
position of trust as a role “characterized by professional or
managerial discretion (i.e., substantial discretionary judgment
that
is
3B1.3,
applies
ordinarily
comment.
to
given
(n.1).
imposters,
considerable
The
so
deference).”
abuse-of-trust
long
as
the
USSG
enhancement
§
also
imposter-defendant
“provides sufficient indicia to the victim that the defendant
legitimately
holds
a
position
of
private
or
public
trust.”
United States v. Brack, 651 F.3d 388, 392-93 (4th Cir. 2011)
(internal quotation marks omitted).
“This is so because [i]n
making the misrepresentation, the defendant assumes a position
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of trust, relative to the victim, that provides the defendant
with the same opportunity to commit a difficult-to-detect crime
that
the
defendant
legitimately
would
held.”
Id.
have
at
had
393
if
the
(internal
position
were
quotation
marks
omitted).
Three factors guide the
sentencing
court
in
determining
whether a person held a position of public or private trust for
purposes of applying the USSG § 3B1.3 enhancement:
(1) whether
the defendant had special duties or access to information not
available to other employees; (2) the extent of the defendant’s
discretion; and (3) whether the defendant’s acts indicate that
he is more culpable than similarly situated actors.
Id.
The
commentary to USSG § 3B1.3 also provides specific examples of
when the
defendant’s
abuse
of
a
application of the enhancement:
position
of
trust
justifies
“an embezzlement of a client’s
funds by an attorney serving as a guardian, a bank executive’s
fraudulent
loan
scheme,
or
the
criminal
sexual
abuse
patient by a physician under the guise of an examination.”
§ 3B1.3,
comment.
(n.1).
In
contrast,
the
same
of
a
USSG
commentary
provides that the “adjustment does not apply in the case of an
embezzlement or theft by an ordinary bank teller or hotel clerk
because
such
positions
described factors.”
are
not
Id.
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characterized
by
the
above-
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Here, in concluding Weiss should receive a USSG § 3B1.3
enhancement for abuse of a position of trust, the district court
found the following facts:
(1) Weiss held himself out to be a
CPA; (2) CPAs have substantial discretionary judgment in making
determinations
as
to
how
to
properly
engage
in
the
various
computations and decisions necessary to properly account for and
pay the various payroll taxes at issue in the present case and
most persons would regard CPAs to be regulated by the state; (3)
Weiss’ holding himself out as a CPA significantly facilitated
his fraud scheme by “g[iving] him certain credential with people
in
business
business
who
and
would
have
be
him
willing
provide
to
the
give
him
services
such
that
type
one
of
would
imagine that a [CPA] would faithfully and properly provide”; and
(4)
Weiss’
holding
himself
out
as
a
CPA
significantly
facilitated the commission and concealment of his fraud scheme
by
allowing
payment
of
him
to
state
manage
and
payroll
federal
tax
functions,
withholdings
government agencies, “without any oversight.”
We
review
the
factual
findings
to
the
the
proper
(J.A. 154).
underlying
court’s USSG § 3B1.3 enhancement for clear error.
v. Dawkins, 202 F.3d 711, 714 (4th Cir. 2000).
including
the
district
United States
To the extent the
district court undertook a legal interpretation of USSG § 3B1.3,
our review is de novo.
United States v. Gormley, 201 F.3d 290,
296 (4th Cir. 2000).
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On appeal, Weiss concedes the government presented evidence
at sentencing that he used the CPA designation in many of his
business documents and on his business cards, and thus, “it may
be reasonable to infer that he held himself out as a CPA to at
least
some
However,
of
Weiss
the
victims.”
contends
that
(Weiss’
a
USSG
Opening
§ 3B1.3
Br.
at
enhancement
9).
is
inapplicable in his case because “there was no evidence adduced
in any form that his false representation of himself as a CPA
induced any of these victims to do business with him or caused
them to repose a higher level of trust or confidence in him
whatsoever.”
Id.
In Weiss’ view, he merely provided payroll
and insurance agent services to his victim corporations and did
not act as their CPAs.
In support of his position, Weiss primarily relies upon our
decision in United States v. Caplinger, 339 F.3d 226 (4th Cir.
2003).
The defendant in Caplinger misrepresented himself as an
accomplished physician in his efforts to attract investors in
his fraudulent schemes involving production of a fake wonder
drug used to treat HIV/AIDS.
defendant’s
offense
level
Id. at 229-30.
under
the
In determining the
Guidelines,
the
district
court assessed a 2-level enhancement pursuant to USSG § 3B1.3
for abuse of a position of trust.
challenged the enhancement on appeal.
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Id. at 235.
The defendant
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On appeal, we framed the issue as “whether Caplinger, by
posing
as
an
accomplished
physician
in
order
to
influence
potential investors, abused a position of trust with respect to
the victims of his fraud scheme within the meaning of” USSG
§ 3B1.3.
Id.
at
236.
In
answering
this
question
in
the
negative, we reasoned that while the false information about the
defendant’s
investors
credentials
and
in
and
making
experience
them
more
assisted
in
confident
convincing
about
their
investment, any trust the investors placed in the defendant was
not
based
physician,
on
a
special
but
misrepresentations
on
relationship
their
about
his
he
had
credentials
drug’s potential for success.
them
belief
misplaced
with
in
and
Id. at 237.
the
fake
as
a
the
wonder
As a result, we
vacated the defendant’s sentence and remanded for resentencing
without the USSG § 3B1.3 enhancement.
Weiss
contends
that
the
Id. at 238.
argument
for
applying
the
enhancement in Caplinger is stronger than in his case because
the sentencing court in Caplinger found that the defendant’s
misrepresentations
induced
the
victims
to
invest
in
his
fraudulent scheme, while in Weiss’ case, the record contains no
evidence that falsely holding himself out as a CPA induced any
victim to participate in any of his schemes in any way.
The government distinguishes Caplinger on the basis that,
in
Caplinger,
the
defendant
participated
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in
an
arms-length
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transaction with each of his victims as opposed to entering into
a fiduciary or personal trust relationship with his victims as
Weiss did.
The
support
primary
of
Tiffanie
its
case
upon
position
Brack
(Brack)
which
is
Brack.
posed
as
a
the
government
In
Brack,
bail
relies
the
bondsman
in
defendant
at
a
North
Carolina jail in order to secure identifying information, cash,
and
the
title
to
two
properties
from
an
elderly
attempting to post bond for his granddaughter.
gentleman
651 F.3d at 389.
Brack pled guilty to one count of wire fraud and one count of
aggravated identity theft.
In sentencing Brack, the district
court applied a USSG § 3B1.3 enhancement for abuse of a position
of
trust
bondsman.
based
upon
Brack’s
purported
position
as
a
bail
Id. at 390.
Brack unsuccessfully challenged the enhancement on appeal.
On appeal, we first concluded that a bail bondsman in North
Carolina
holds
a
position
of
public
trust
leading
assumption of certain fiduciary duties to their clients.
394.
bail
to
the
Id. at
Second, we concluded that Brack’s purported position as a
bondsman
significantly
contributed
to
the
commission
or
concealment of her offenses because the position “provide[d] a
seemingly valid basis for her to make initial contact with [the
victim grandfather] at the jail, [and] it also allowed Brack to
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secure
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[the
victim
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grandfather’s]
identifying
without revealing her criminal intent.”
The
government
argues
that
information
Id. at 395.
the
relevant
facts
in
the
present case are on all fours with Brack in that (1) Weiss
represented
himself
throughout
the
course
of
his
unlawful
activity as being a CPA, thus providing his victims sufficient
indicia that he was trustworthy and qualified to handle their
payroll
processing,
and
(2)
Weiss’
misrepresentations
about
being a CPA created trust relationships with his clients which
allowed
him
to
manage
the
gross
payroll
of
several
large
companies virtually unchecked.
We
uphold
the
district
court’s
2-level
enhancement
in
Weiss’ offense level pursuant to USSG § 3B1.3 for abuse of a
position of trust.
“[T]he central purpose of § 3B1.3 is to
penalize
who
defendants
take
advantage
of
a
position
that
provides them with the freedom to commit a difficult-to-detect
wrong.”
Id. at 393 (internal quotation marks and alteration
marks omitted).
Here, there is more than sufficient evidence in
the record from which a reasonable person could infer that Weiss
had
a
trust
relationship
with
at
least
one
of
his
victim-companies which provided him with the freedom to commit a
difficult-to-detect
wrong.
While
all
payroll
processing
companies are not headed up by a CPA, when a CPA does head up a
payroll
processing
company,
with
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attendant
required
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calculations for tax withholding and payments over to the IRS
and
applicable
believes
that
accounting/tax
state
it
agency,
has
field
to
hired
the
a
ensure
client
licensed
the
company
professional
proper
payroll liabilities and responsibilities.
reasonably
processing
in
the
of
its
Weiss only had to
take advantage of his trust relationship with one client on one
occasion in order for the enhancement to apply.
This fact is
easily inferred from the record evidence.
Caplinger is materially distinguishable on the basis that
the defendant in Caplinger did not have a trust relationship
with any of his investor victims.
The present case is analogous
to Brack in the sense that we can infer from the evidence in the
present case that Weiss was able to perpetrate his fraud, at
least in part, because of a trust relationship with at least one
of his victim companies.
In sum, the district court did not err in increasing Weiss’
offense level by 2 levels pursuant to USSG § 3B1.3 for abuse of
a position of trust.
IV.
We now turn to Weiss’ challenge to the district court’s
loss calculation under the Guidelines.
In calculating Weiss’
offense level under the Guidelines, the district court found the
amount of pecuniary harm foreseeable to Weiss with respect to
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his
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offense
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conduct
$7,140,339.18.
This
and
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all
amount
relevant
added
20
conduct
levels
to
to
Weiss’
be
base
offense level of 7 for a loss greater than $7,000,000.00, but
less than $20,000,000.00.
USSG § 2B1.1(b)(1)(K).
The district
court reached this figure by finding as follows:
(1) Weiss
failed to pay the IRS $4,132,044.16 in employment taxes that he
collected from his client companies’ payrolls; (2) Weiss failed
to pay $260,839.00 in state taxes for his client companies; (3)
Weiss
failed
premiums
for
to
pay
his
$559,663.02
client
in
companies;
workers’
(4)
Weiss
compensation
fraudulently
obtained an insurance check of $177,480.00; (5) Weiss defrauded
BB&T
of
personal
knowingly
$916,500.00;
federal
and
and
income
(6)
tax
intentionally
Weiss
on
his
failed
owes
$1,093,813.00
illegal
to
report
gains
on
his
in
that
he
federal
income tax returns.
Below, Weiss did not take issue with the district court’s
total loss figure up to $6,046,526.18, which amount would have
added 18, as opposed to 20 levels to his base offense level of 7
for
a
loss
$7,000,000.00.
greater
USSG
than
§
$2,500,000.00,
2B1.1(b)(1)(J);
see
but
less
than
also
(J.A.
121)
(Weiss’s attorney at sentencing: “[H]e is admitting or conceding
to 18 additional levels.”).
the
district
court’s
Weiss also did not take issue with
finding
that
he
owes
$1,093,813.00
personal federal income taxes on his illegal income.
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in
Weiss did,
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however, take issue with the district court’s inclusion of the
$1,093,813.00 amount as part of the total loss calculation with
respect to USSG § 2B1.1(b)(1).
Weiss argued below that “the
income tax due on illegal gain cannot be included in the total
loss determination in addition to the illegal gain under [USSG]
§
2B1.1(b)(1)
without
authority.”
commentary
(J.A.
to
case
authority
285).
USSG
§
Weiss
2T1.1
or
specific
reasoned
(the
that
guideline
because
Guideline
the
specifically
pertaining to offenses involving taxation), expressly provides
for
the
obtained
counting
income
corporate
income
of
personal
derived
with
from
respect
a
income
tax
due
defendant’s
to
a
on
illegally
underreporting
Subchapter
C
of
corporation
which he solely owns, the absence of such express commentary in
USSG § 2B1.1 means that the United States Sentencing Commission
did not intend to include personal income taxes on illegally
obtained income as part of the loss calculation under USSG §
2B1.1(b)(1).
At sentencing below, the district court overruled Weiss’
objection
to
including
the
$1,093,813.00
in
personal
federal
income tax due on his illegal gains as part of the total loss
figure under USSG § 2B1.1(b)(1) because the plain language of
USSG § 2B1.1 and its accompanying commentary allows for such
inclusion.
In
this
regard,
the
district
court
relied
upon
Application Note 3(A)(iv) to USSG § 2B1.1, which provides that,
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for purposes of determining the loss under USSG § 2B1.1(b)(1),
“‘reasonably
foreseeable
pecuniary
harm’
means
pecuniary
harm
that the defendant knew or, under the circumstances, reasonably
should have known was a potential result of the offense.”
§
2B1.1,
comment.
(n.3(A)(iv)).
Consistent
with
the
USSG
plain
language of this commentary, the district court counted both (1)
the pecuniary harm to Weiss’ client companies resulting from
Weiss’ failure to pay the payroll taxes due on his clients’
payroll and (2) the individual federal income taxes due from
Weiss
on
such
illegally
obtained
gains
because
Count
35,
charging Weiss with corrupt interference with internal revenue
laws in violation of 26 U.S.C. § 7212(a), alleged separate overt
acts of Weiss keeping the payroll taxes for himself and then
filing
such
individual
illegally
federal
obtained
income
funds
as
tax
forms
personal
without
income.
declaring
In
regard, the district court specifically stated:
The defendant committed frauds on other individuals
and companies, and he also defrauded the government in
the process by not paying tax on the money that he
defrauded others out of.
Those are two separate
losses, and it seems appropriate to calculate both as
a part of the loss amount, particularly where he is
charged with both. If I were not to do that, then he
would be getting the benefit of a lower guideline
range that does not fully incorporate the loss that
was both intended and which occurred in this case.
(J.A. 115-16).
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As for Weiss’ argument with regard to the commentary in
USSG § 2T1.1, the district court rejected it on the ground that
the United States Sentencing Commission added such commentary as
a clarifying amendment in response to a circuit split on the
issue of
whether
illegally
a
obtained
defendant’s
income
personal
should
income
count
in
taxes
the
due
total
on
loss
calculation under USSG § 2T1.1, which means the United States
Sentencing Commission intended all along for (1) the pecuniary
harm resulting from a defendant’s underreporting of corporate
income
with
respect
to
a
Subchapter
C
corporation
which
the
defendant solely owns and (2) the pecuniary harm resulting from
the defendant’s failure to claim as individual income the funds
he
obtained
counted
as
from
part
underreporting
of
the
the
pecuniary
corporate
harm
foreseeable
defendant from his offense and relevant conduct.
court
concluded
that,
if
anything,
the
income
to
to
be
the
The district
clarifying
amendment
strengthened the case for counting the foreseeable loss to the
government in the form of unpaid federal income taxes resulting
from Weiss’ failure to claim his ill-gotten gains as personal
income on his federal income tax returns.
On
appeal,
Weiss
continues
argument he pressed below.
to
press
this
same
line
of
Notably, Weiss did not cite a single
case in support of his position below and does not do so in his
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Opening Brief on appeal.
Pg: 19 of 23
He also does not address this issue at
all in his Reply Brief on appeal.
The
the
government’s
reasoning
government
argument
of
the
points
out
in
response
court.
district
that
the
essentially
Additionally,
Guidelines’
tracks
grouping
the
rules
support the district court’s inclusion of Weiss’ personal income
liability on his unreported illegally obtained income: “‘In the
case
of
offense
counts
level
corresponding
grouped
together
applicable
to
the
to
a
pursuant
Group
aggregated
to
is
§
the
quantity,
3D1.2(d),
offense
the
level
determined
in
accordance with Chapter Two and Parts A, B and C of Chapter
Three.’”
USSG
§
(government’s Br. at 47) (quoting USSG § 3D1.3(b)).
3D1.2(d)
applies
when
the
offense
level,
as
in
the
present case, is determined largely on the basis of the total
amount of harm or loss.
We find Weiss’ position wholly unpersuasive.
First, Weiss’
position ignores the plain language of the relevant Guideline
sections
and
their
relevant
definition
corresponding
commentary,
for
harm
pecuniary
in
including
Application
the
Note
3(A)(iv) to USSG § 2B1.1 and USSG § 3D1.3(b)’s direction to
aggregate the loss in the case of counts grouped together when
the offense level is determined largely on the basis of the
total amount of harm or loss.
Second, the district court’s
reasoning in rejecting Weiss’ argument regarding USSG § 2T1.1 is
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the
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money.
The
United
Pg: 20 of 23
States
Sentencing
Commission’s
addition of clarifying commentary to USSG § 2T1.1 in order to
address a similar counting issue with respect to underreporting
corporate
income
issue.
court’s
If
in
no
anything,
inclusion
of
way
the
supports
Weiss’
commentary
Weiss’
position
supports
individual
the
federal
on
this
district
income
tax
liability for his ill-gotten gains on the basis that the United
States Sentencing Commission views the tax loss to the federal
government
resulting
from
a
defendant’s
failure
to
report
illegally obtained income from an underlying tax related fraud
as a separate and distinct harm from such underlying fraud.
The
crucial point is that the underlying offense is complete when a
defendant fraudulently diverts income to himself, so that when
the same defendant fails to report such fraudulently obtained
income as income on his federal income tax return, a second and
distinct offense is committed.
That is the way the government
charged Weiss in this case in Count 35 to which he pled guilty.
Therefore, there is no merit to Weiss’ position that he should
not
be
held
accountable
for
all
of
his
offense
conduct,
including filing individual federal income tax returns in which
he knowingly and intentionally failed to claim his illegally
gotten gains as income.
In sum, the district court’s loss figure with respect to
determining Weiss’ offense level under the Guidelines stands.
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V.
In
his
last
issue
on
appeal,
Weiss
claims
the
district
court abused its discretion by failing sua sponte to appoint him
various
experts
to
assist
in
his
defense
at
sentencing.
According to Weiss, with respect to his sentencing, such failure
denied him his rights to fundamental fairness, due process of
law, and effective assistance of counsel because he did not have
expert assistance to help him in at least four ways.
First,
Weiss claims that he needed the assistance of a tax expert to
accurately assess and challenge the $1,093,813.00 figure in the
PSR listed as the amount of personal income tax that he should
have paid on his illegally obtained income. *
According to Weiss’
appellate attorney (different from his attorney below), Weiss
“apparently felt compelled to stipulate to that amount, because
he was unable to challenge it.”
Second,
Weiss
contends
that
he
(Weiss’ Opening Br. at 18).
needed
expert
assistance
to
challenge the amount of the loss attributable to the loan fraud
allegations pertaining to BB&T.
Third, Weiss contends that he
needed an expert witness to help him prove that his companies
*
According to the PSR, “[t]his amount was calculated by an
IRS agent using the defendant’s bank records, tax returns, and
paper and electronic documents seized during the May 26, 2010,
search of his residence.”
(J.A. 253).
The PSR went on to
characterize the $1,093,813.00 figure as “a conservative figure
allowing Defendant Weiss all allowable credits.” Id.
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were not, in fact, PEOs as defined under North Carolina law,
such that he could have avoided a sentencing enhancement under
USSG
§
2B1.1(b)(10)(C)
implementation
of
his
for
using
scheme.
sophisticated
Fourth
and
means
in
finally,
the
Weiss
contends that “common sense dictates that the sheer volume of
records
and
the
complex
analyses
upon
which
the
government
relied over the course of its four year investigation can only
be effectively cataloged, analyzed and challenged with expert
assistance.”
(Weiss’ Opening Br. at 22).
As the government correctly contends, because Weiss never
requested
critical
any
to
of
his
the
expert
ability
to
assistance
mount
a
he
now
claims
successful
defense
was
at
sentencing, our review is limited to reviewing for plain error.
See Fed. R. Crim. P. 52(b); United States v. Olano, 507 U.S.
725, 731-32
(1993).
Under plain error review, an appellate
court has the discretion to correct a forfeited error if:
(1)
there
or,
is
error;
equivalently,
(2)
the
error
‘obvious,’”),
is
Olano,
plain
507
(i.e.,
U.S.
at
“‘clear’
734;
(3)
the
error affects the defendant’s substantial rights; and (4) the
appellate court determines, after examining the particulars of
the
case,
that
the
error
seriously
affects
the
fairness,
integrity, or public reputation of judicial proceedings.
732-34.
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Weiss’ assignment of error regarding his need for experts
to aid in his defense at sentencing does not survive plain error
review.
has
Assuming arguendo that Weiss can establish error as he
alleged
(a
big
stretch
in
and
of
itself),
there
is
absolutely no basis for us to conclude that such error is plain.
See id. at 734 (noting that an error is plain if it is “‘clear’
or, equivalently, ‘obvious’”).
Accordingly, Weiss is entitled
to no relief with respect to his argument on appeal regarding
his need for expert assistance in preparing for his defense at
sentencing,
which
need
he
never
made
known
to
the
district
court.
VI.
For the foregoing reasons, we affirm Weiss’ sentence in
toto.
AFFIRMED
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