United States v. Laws

• Decision Date: 15 March 2016
• Docket Number: 14–3640,14–3642.,Nos. 14–3636,14–3639,s. 14–3636
• Parties: UNITED STATES of America, Plaintiff–Appellee v. Brenda S. LAWS, Defendant–Appellant. United States of America, Plaintiff–Appellee v. Lareka S. Laws, Defendant–Appellant. United States of America, Plaintiff–Appellee v. Milton L. Laws, Jr., Defendant–Appellant. United States of America, Plaintiff–Appellee v. Jameel L. Laws, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

819 F.3d 388

UNITED STATES of America, Plaintiff–Appellee

v.Brenda S. LAWS, Defendant–Appellant.

United States of America, Plaintiff–Appellee

v.Lareka S. Laws, Defendant–Appellant.

United States of America, Plaintiff–Appellee

v.Milton L. Laws, Jr., Defendant–Appellant.

United States of America, Plaintiff–Appellee

v.Jameel L. Laws, Defendant–Appellant.

Nos. 14–3636

14–3639

14–3640

14–3642.

United States Court of Appeals, Eighth Circuit.

Submitted: Dec. 15, 2015.

Filed: March 15, 2016.

Chris Tarver, AFPD, Jerome E. Larkowski, Jennifer B. Wiggins, Little Rock, AR, Sara F. Merritt, North Little Rock, AR, for Defendant–Appellant.

Stephanie Mazzanti, Little Rock, AR, for Plaintiff–Appellee.

Before MURPHY, BENTON, and KELLY, Circuit Judges.

KELLY

, Circuit Judge.

Brenda Laws, Lareka Laws, Milton Laws, and Jameel Laws were charged with conspiracy to defraud the United States by falsely claiming tax refunds in violation of 18 U.S.C. § 286

, and making false claims to the IRS in violation of 18 U.S.C. § 287. These charges arose from a scheme in which the defendants filed more than 200 tax returns claiming first-time homebuyer tax credits to which the named taxpayer was not entitled. The tax refunds, including the falsely-claimed credit, were then deposited into one of 17 bank accounts owned or controlled by a member of the Laws family. The total amount of the refunds fraudulently claimed was $1,730,086, and the total amount of the refunds issued was $1,364,171.

Following a jury trial, the four defendants were found guilty on all counts.¹ On November 6, 2014, the district court entered judgment and sentenced the defendants to terms of imprisonment ranging between 30 and 64 months. On appeal, Brenda Laws challenges the district court's calculation of the applicable Guidelines sentencing range; Milton Laws challenges the court's denial of his motion to suppress; Lareka Laws challenges the denial of her motion for acquittal; and Jameel Laws challenges the sufficiency of the evidence to support his conviction. We address each argument in turn.

I. Brenda Laws

In sentencing Brenda Laws, the district court overruled her objection to three sentencing enhancements, which collectively raised her total offense level from 22 to 32. Based on the total offense level of 32, the court sentenced Laws to 64 months on the conspiracy count and 30 months on the false claims count, to run concurrently. Laws appeals the application of the three enhancements, arguing that they were erroneously applied given the facts and circumstances of her offense. We review the district court's interpretation and application of the Sentencing Guidelines de novo, and review findings of fact for clear error. United States v. Ault, 598 F.3d 1039, 1040 (8th Cir.2010)

.

The first sentencing enhancement Laws challenges is the 2–level sophisticated means enhancement under USSG § 2B1.1(b)(10)(C)

. That enhancement applies when the offense involved "especially complex or especially intricate ... conduct." USSG § 2B1.1(b)(10)(C), Application Note 9(B) (2013). The relative sophistication of a scheme of fraudulent conduct is "viewed in light of the fraudulent conduct and differentiated, by assessing the intricacy or planning of the conduct, from similar offenses conducted by different defendants." United States v. Hance, 501 F.3d 900, 909 (8th Cir.2007). Thus, for the enhancement to apply, the government must show that the offense conduct at issue was notably more complex or intricate than the garden-variety version of that offense. Id. The question is not whether the offense is generally considered a sophisticated one—for instance, securities fraud as compared to simple assault. Rather, the question is whether the particular offense conduct was more than usually sophisticated when compared to the offense in its basic form. Id. at 909–11 (holding that renting a post office box under an assumed name and using that box to carry out a fraud scheme was not distinguishable "from the multitude of other mail fraud cases").

Here, the district court concluded that the "repetitive and coordinated conduct" involved in the offense made its means sophisticated. Even if any single part of the offense was not particularly complicated, "repetitive and coordinated conduct can amount to a sophisticated scheme." United States v. Sethi, 702 F.3d 1076, 1079 (8th Cir.2013)

(quoting United States v. Fiorito, 640 F.3d 338, 351 (8th Cir.2011) ). Importantly, however, mere repetition is not sufficient to make an offense sophisticated. Instead, the sophistication of the offense conduct is associated with the means of repetition, the coordination required to carry out the repeated conduct, and the number of repetitions or length of time over which the scheme took place. See, e.g., Fiorito, 640 F.3d at 351 (scheme required coordinating sale or refinancing of multiple homes, took place over the course of three years, and involved at least 11 victims); United States v. Bistrup, 449 F.3d 873, 883 (8th Cir.2006) (scheme required repeatedly lying to victims, was maintained by using later-acquired funds to make partial payments to earlier victims, required the use of multiple financial accounts, and took place over almost five years); United States v. Finck, 407 F.3d 908, 915 (8th Cir.2005) (scheme to obtain vehicles required obtaining multiple false confirmations that money had been transferred and coordinating sale of multiple vehicles in different states).

The government argued, in support of the enhancement, that the offense in this case involved opening and closing over 20 bank accounts for the purpose of receiving fraudulent refunds; filing tax returns without a preparer name listed; filing tax returns listing false addresses, "which made it difficult to verify information with the victims"; using P.O. boxes to receive tax refunds and correspondence; and filing over 200 fraudulent returns. See USSG § 2B1.1(b)(10)(C)

, Application Note 9(B); Hance, 501 F.3d at 910 ; Fiorito, 640 F.3d at 351 ; United States v. Huston, 744 F.3d 589, 592 (8th Cir.2014). Tax fraud is generally a sophisticated offense, and any single one of the aggravating factors here may not be sufficient to elevate the offense conduct beyond the ordinary version of the offense. Moreover, we are not convinced that the mere repetitive conduct as it played out in this particular case rendered it sophisticated. But in combination, the multiple bank accounts, the use of multiple P.O. boxes, the filing of returns with no preparer listed, and the filing of returns listing false addresses demonstrates a carefully-considered attempt to conceal the nature of the scheme, to make identifying its multiple perpetrators more difficult, and to partially obscure the identity of the victims. See USSG § 2B1.1(b)(10)(C)

, Application Note 9(B). This, combined with the fact that at least six people were involved in executing the scheme and collectively managed to file more than 200 fraudulent returns claiming over $1.7 million in refunds, makes the offense conduct in this case "notably more intricate" than the garden-variety conspiracy to defraud the United States or false claim to the IRS. See Hance, 501 F.3d at 910. Accordingly, we conclude that the district court did not err in applying the sophisticated means sentencing enhancement to Brenda Laws.

The second sentencing enhancement Laws challenges is the 4–level organizer or leader enhancement under USSG § 3B1.1(a)

. The organizer/leader enhancement applies when the defendant was "an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." USSG § 3B1.1(a) (2013). In determining whether to apply the enhancement, the court

should consider ... the exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others.

USSG § 3B1.1(a)

, Application Note 4. Though all these factors are relevant, the primary requirement is that the defendant "directed or procured the aid of underlings" in committing the offense. United States v. Adejumo, 772 F.3d 513, 532 (8th Cir.2014), cert. denied sub nom. Okeayainneh v. United States, ––– U.S. ––––, 135 S.Ct. 1869, 191 L.Ed.2d 742 (2015) ("[W]e have always required evidence that the defendant directed or procured the aid of underlings.") (quoting United States v. Irlmeier, 750 F.3d 759, 764 (8th Cir.2014) ).

In this case, there is insufficient evidence to show that Brenda Laws was an organizer or leader. The only evidence in support of this conclusion is the fact that Laws owned the house where the IRS searched and seized relevant evidence and was the "owner and subscriber" for the internet access used to submit the fraudulent tax returns. There was no evidence that Laws planned the fraudulent scheme, organized or directed her co-conspirators in carrying out the scheme, or otherwise controlled the commission of the offense. The facts that Laws' co-conspirators were her adult children and that the offense was apparently committed in her home may give rise to a general suspicion that she was likely in control of the family's conspiracy—but this gut feeling is insufficient to support a conclusion, by a preponderance of the evidence, that Laws was an organizer or leader of the offense for purposes of this enhancement. While the district court found that Laws "exercised decision-making authority over other participants," neither the court nor the government identified any specific evidence to support this conclusion. The evidence in the record is simply insufficient to support a finding that Laws was an organizer or leader, and application of this sentencing enhancement was erroneous.

Third and finally, Laws challenges the 4–level sentencing...