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United States v. Thomsen

United States Court of Appeals, Ninth Circuit

July 28, 2016

United States of America, Plaintiff-Appellee
v.
Neil Thomsen, Defendant-Appellant.

          Argued and Submitted June 8, 2016 Pasadena, California

         Appeal from the United States District Court No. 3:10-CR-02810-BEN for the Southern District of California Roger T. Benitez, District Judge, Presiding

          Gail Ivens (argued), Deputy Federal Public Defender; Hilary L. Potashner, Federal Public Defender; Office of the Federal Public Defender, Los Angeles, California; for Defendant-Appellant.

          Joseph J.M. Orabona (argued), Assistant United States Attorney; Peter Ko, Chief, Appellate Section, Criminal Division; Laura E. Duffy, United States Attorney; United States Attorney's Office, San Diego, California; for Plaintiff-Appellee.

          Before: Stephen Reinhardt and Kim McLane Wardlaw, Circuit Judges, and Mark W. Bennett, Senior District Judge.[*]

         SUMMARY[**]

         Criminal Law

         The panel affirmed in part, reversed in part, and remanded in a case in which the defendant, a tax preparer, was convicted of 32 federal offenses arising from a tax fraud scheme.

         The panel held that 18 U.S.C. § 1546(a) (fraud and misuse of visas, permits, and other documents) does not apply to documents that are not immigration-related, such as U.S. passports or U.S. passport cards, and that the district court therefore erred by denying the defendant's motion for judgment of acquittal as to Count 33, which charged a violation of § 1546(a), and Count 34, which charged aggravated identity theft during and in relation to the felony passport card fraud offense.

         The panel held that the district court did not err, as a matter of law, in concluding that awarding restitution for related conduct beyond the conduct for which the defendant was specifically convicted was within statutory bounds. But the panel held that the district court clearly erred, on a question of fact, in finding that the conduct at issue in a second case, in which the defendant was not convicted, was sufficiently "related" to the conduct at issue in the first case to warrant inclusion of losses in the order for restitution pursuant to 18 U.S.C. § 3663A(a)(2).

         The panel held that the district court erred by using the 2011 rather than the 2008 version of U.S.S.G. § 2B1.1(b)(2)(C) to calculate the number of victims at sentencing.

         The panel held that the primary flaw with the district court's "intended loss" finding under U.S.S.G. § 2B1.1(b)(1) is that the district court improperly considered the intended loss from the second case, which did not result in the defendant's conviction, even though that case did not involve "relevant conduct" because it was not "part of the same course of conduct or common scheme or plan as the offense of conviction." The panel wrote that furthermore the United States nowhere identifies evidence establishing-or identified by the district court as the basis for the finding-that specific challenged amounts of intended loss in the first case were, in fact, actual or intended loss.

         Noting the absence of any authority holding that tax returns are "means of identification, " the panel held that the district court improperly imposed an enhancement, U.S.S.G. § 2B1.1(b)(10) (2008), for using social security numbers of others to produce personal tax returns.

         The panel held that the district court properly applied a sophisticated means enhancement, U.S.S.G. § 2B1.1(b)(9)(C) (2008).

         The panel wrote that because it vacated the conviction on Count 33, U.S.S.G. § 2L2.2(c)(1)(A)'s cross-reference to U.S.S.G. § 2X1.1 is inapplicable.

         The panel held that the district court did not plainly err in applying an "abuse of trust" enhancement under U.S.S.G. § 3B1.3, where persons in whose name the defendant filed fraudulent tax returns by using personal information provided to him in his employment as a tax preparer were subject to emotional and other burdens as a result of his conduct.

         The panel held that the district court did not err in applying an enhancement for "obstruction of justice" under U.S.S.G. § 3C1.1.

          OPINION

          BENNETT, Senior District Judge:

         On July 14, 2010, Neil Thomsen, then a 67-year-old retired engineer turned tax preparer, was charged, as the sole defendant, with 34 federal offenses arising from a tax fraud scheme. On December 8, 2011, a jury convicted him of 32 of those offenses, after the prosecution withdrew two. He was sentenced to fifteen years of imprisonment and ordered to pay just over $500, 000 in restitution. He now appeals his conviction of two offenses, the restitution order, and the calculation of his advisory guidelines sentencing range. We affirm in part, reverse in part, and remand for further proceedings.

         I. INTRODUCTION

         A. Charges And Conviction

         The charges against Thomsen arose from an alleged tax fraud scheme, beginning on a date unknown and continuing through about April 15, 2009, that is, for the 2009 tax season relating to the 2008 tax year. The Indictment alleged the essence of the scheme was "that defendant THOMSEN fraudulently used the personal identification, including names and [social security numbers], of individuals, for whom he prepared tax returns or who had their tax returns prepared by an entity where defendant THOMSEN was employed, in order to file false income tax returns with the IRS and to obtain tax refunds and tax preparation fees to which he was not entitled." Indictment, ¶ 11. Two of the charges require specific mention, as they are the only convictions that Thomsen appeals: In Count 33, Thomsen was charged with fraud and misuse of visas, permits, and other documents, in violation of 18 U.S.C. § 1546(a), arising from his use, on or about April 25, 2009, of a United States passport card bearing his photograph, but the name and biographical information of another person, on an application for an Earth Class Mail account; and, in Count 34, he was charged with aggravated identity theft, in violation of 18 U.S.C. § 1028A, during and in relation to the felony passport card fraud offense.[1]

         Thomsen's trial began on November 29, 2011, and continued on December 2, 6, 7, and 8. The prosecution dismissed two mail fraud counts (Counts 5 and 6) before the case was submitted. The jury convicted Thomsen of the other 32 counts. Thomsen obtained permission to proceed pro se, thereafter, but with advisory counsel. On March 28, 2012, Thomsen filed a pro se Motion For Judgment Of Acquittal, as relevant here, on Counts 33 and 34. The court denied that motion on April 17, 2013.

         B. Charges And Disposition In The Second Case

         On May 31, 2011, well before Thomsen's trial on the first Indictment, Thomsen and three co-defendants were charged in a separate Indictment, in a separate case, with conspiring, from a date unknown through about May 2011, to defraud the United States by obtaining, and aiding others to obtain, the payment of false, fictitious, and fraudulent claims against the United States, specifically, income tax refunds, in violation of 18 U.S.C. § 286 and 18 U.S.C. § 2. The second Indictment alleged overt acts in furtherance of this conspiracy between December 30, 2009, and March 29, 2010.[2] Thomsen's three co-defendants all eventually pleaded guilty to the fraudulent claims conspiracy charge in the second case and were sentenced to time served. They were also ordered to pay restitution in the amount of $197, 922.04, jointly and severally. Thomsen neither pleaded guilty to nor was convicted on any of the charges against him in the second case. The second indictment was eventually dismissed as to Thomsen after he was sentenced in the first case.

         C. Sentencing

         A Presentence Report (PSR) concerning Thomsen, filed July 20, 2012, indicates that the probation officer used the November 1, 2011, Guidelines Manual. The PSR calculated an advisory guidelines range of 135 to 168 months of imprisonment, recommended a sentence approximately in the middle of that range, and recommended restitution in the amount of $317, 337. At the first of three sentencing hearings, on March 4, 2013, [3] Thomsen recommended a sentence of not more than 5 years (60 months), and the prosecution recommended a sentence of 416 months. The prosecution stated its intent to increase the amount of restitution it was seeking, based on its desire to "roll that second case as relevant conduct into the first case, " for a total of over $500, 000 in restitution. Not surprisingly, Thomsen objected.

         On April 17, 2013, the probation officer filed an Addendum To Presentence Report (Addendum), addressing the parties' objections to the original PSR. Neither the defendant nor the AUSA objected to the use of the 2011 Guideline Manual in the original PSR as the use of the wrong year of the Manual, nor did the probation officer recognize this crucial mistake. The Addendum did, however, recalculate Thomsen's advisory guidelines sentence. Those calculations are significant to Thomsen's appeal.

         Specifically, for offenses in Group One (Counts 1-4, 7-16, and 17-24), the Addendum started with a base offense level of 7, pursuant to U.S.S.G. § 2B1.1(a)(1); added 14 levels for an intended loss between $400, 000 and $1, 000, 000, pursuant to U.S.S.G. § 2B1.1(b)(1)(H); added 6 levels for more than 250 victims, pursuant to U.S.S.G. § 2B1.1(b)(2)(C); added 2 levels for "sophisticated means, " pursuant to U.S.S.G. § 2B1.1(b)(10)(C); added 2 levels for using victims' social security numbers to produce other means of identification, identified as personal tax returns, pursuant to U.S.S.G. § 2B1.1(b)(11)(C)(i); added 2 levels for abuse of a position of trust, because Thomsen was a tax preparer to whom the personal information of others had been entrusted, and he used that information for his own financial gain, pursuant to U.S.S.G. § 3B1.3; and added 2 levels for obstruction of justice, based on false testimony at trial, pursuant to U.S.S.G. § 3C1.1. These calculations resulted in an adjusted offense level of 35 for Group One.

         For the offense in Group Two (Count 33), the Addendum started with a base offense level of 7, pursuant to U.S.S.G. § 2L2.2(c)(1), using the cross-reference to U.S.S.G. § 2X1.1, because Thomsen used a passport or visa in the commission of a felony, with underlying substantive offenses of mail fraud, false claims, and fraudulent use of a social security card, making the corresponding offense level the one set out in U.S.S.G. § 2B1.1. The Addendum then made the identical adjustments to the offense level that it had made for the Group One offenses. These calculations, again, resulted in an adjusted offense level of 35.

         The Addendum determined that the multiple count adjustment, pursuant to U.S.S.G. § 3D1.4, required an increase of two levels to 37. The Addendum then rejected any adjustment for acceptance of responsibility, pursuant to U.S.S.G. § 3E1.1(a). With a criminal history category of I, these calculations resulted in an advisory guidelines range of 210 to 262 months of imprisonment. The Addendum recommended a 72-month sentence (concurrent as to each count), however, based on the 18 U.S.C. § 3553(a) factors. The Addendum then applied a mandatory sentence of 2 years, consecutively, for each of Counts 25 through 32 and 34, which would have increased the sentence to 24 years (288 months). The Addendum recommended that the mandatory 2-year sentences on these counts run concurrently, however, which raised the recommended sentence to only 96 months (8 years).

         At Thomsen's final sentencing hearing, the district judge heard arguments from the parties, then imposed sentence. More specifically, the district judge stated,

First, I'm going to deal with the objection [sic]. There were various objections, lots of objections that were filed by Mr. Thomsen. I have a trial with a jury coming in in a short while, so I don't have really the time to go through all of them. I'm simply going to indicate that I have reviewed probation's response to those objections, and I adopt probation's views on every one of those objections. I think there was one exception. Let me double-check.
Well, I note that there was an objection. I believe it was objection no. 16, which the court will grant.

         The district judge concluded that some objections (nos. 17-19) would have no effect on the sentence that he would impose, then reiterated that he was "adopt[ing] probation's findings and recommendations in connection" with the remaining objections.

         Next, the district judge summarized and accepted the sentencing calculations in the Addendum; described the seriousness of the offense, and his reasons for rejecting both the prosecution's request for a sentence of 416 months and the probation officer's recommendation of 96 months; and explained his application of the § 3553(a) factors. Ultimately, the district judge imposed a sentence of 15 years (180 months). The district judge also ordered restitution in the amount of $515, 257.75, with a credit of $61, 545, and a remaining balance of $453, 712.75 to be paid to the IRS, which included the loss in the second case against Thomsen and three co-defendants. The district judge expressly ordered "that the restitution in [the second case], in the amount of $197, 922.04, be made payable jointly and severally with the other co-defendants in that case."

         D. Issues On Appeal

         Thomsen filed timely notices of appeal. Thomsen's request to represent himself pro se on this appeal was denied, and his current counsel was appointed. Thomsen has limited his appeal to three issues: (1) the denial of his motion for judgment of acquittal as to Counts 33 and 34; (2) the restitution order; and (3) errors in sentencing, although this last issue has numerous subissues. In his brief, Thomsen states, "Aside from counts 33 and 34, he neither challenges his conviction nor seeks to have it set aside."

          II. LEGAL ANALYSIS

         A. Denial Of The Motion For Judgment Of Acquittal

         Thomsen argues, first, that the district court should have granted his motion for judgment of acquittal as to Counts 33 and 34, which charged a violation of 18 U.S.C. § 1546 and a related aggravated identity theft offense, respectively. Thomsen contends that § 1546 does not apply to a passport card.

         1. Applicable standards

         We review de novo questions of statutory interpretation. See, e.g., Fang Lin Ai v. United States, 809 F.3d 503, 506 (9th Cir. 2015); United States v. Kowalczyk, 805 F.3d 847, 856 (9th Cir. 2015). We recently stated,

When interpreting a statute, we are guided by the fundamental canons of statutory construction and begin with the statutory text. See BedRoc Ltd., LLC v. United States, 541 U.S. 176, 183, 124 S.Ct. 1587, 158 L.Ed.2d 338 (2004). We interpret statutory terms in accordance with their ordinary meaning, unless the statute clearly expresses an intention to the contrary. United States v. Ron Pair Enters., Inc., 489 U.S. 235, 242, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). We must "interpret [the] statut[e] as a whole, giving effect to each word and making every effort not to interpret a provision in a manner that renders other provisions of the same statute inconsistent, meaningless or superfluous." Boise Cascade Corp. v. U.S. E.P.A., 942 F.2d 1427, 1432 (9th Cir.1991). Additionally, "[p]articular phrases must be construed in light of the overall purpose and structure of the whole statutory scheme." United States v. Lewis, 67 F.3d 225, 228-29 (9th Cir.1995).

United States v. Neal, 776 F.3d 645, 652 (9th Cir. 2015); accord United States v. Leal-Felix, 665 F.3d 1037, 1042 (9th Cir. 2011) ("Interpretation of a word or phrase [in a statute] depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authorities that inform the analysis." (citation and internal quotation marks omitted)). Notwithstanding the importance of the text itself, we "must avoid a literal interpretation of the statute that produces an 'absurd' result." United States v. Shill, 740 F.3d 1347, 1353 (9th Cir. 2014) (citing United States v. American Trucking Ass'ns, 310 U.S. 534, 543 (1940)); United States v. Thompson, 728 F.3d 1011, 1018 (9th Cir. 2013) (explaining that courts must not "violate[] the precept that '[w]henever possible, "we interpret statutes so as to preclude absurd results"'" (quoting United States v. Cabaccang, 332 F.3d 622, 631 (9th Cir. 2003), with citations omitted)).

         Generally, we may turn to legislative history for guidance only "[w]hen a statute is susceptible to two or more meanings, . . . [b]ut 'the plainer the language, the more convincing contrary legislative history must be.'" Schroeder v. United States, 793 F.3d 1080, 1085 (9th Cir. 2015) (quoting Church of Scientology of Cal. v. U.S. Dep't of Justice, 612 F.2d 417, 422 (9th Cir. 1979)); United States v. Crooked Arm, 788 F.3d 1065, 1073 (9th Cir. 2015) ("We may consider legislative history if the statute is ambiguous or if 'the legislative history clearly indicates that Congress meant something other than what it said.'" (quoting Carson Harbor Vill., Ltd. v. Unocal Corp., 270 F.3d 863, 877 (9th Cir. 2001) (en banc), in turn quoting Perlman v. Catapult Entm't, Inc., 165 F.3d 747, 753 (9th Cir. 1999)). This limitation notwithstanding, we have also used legislative history to confirm an interpretation guided by other canons. See, e.g., United States v. Hui Hsiung, 778 F.3d 738, 754 (9th Cir. 2014) (noting, "The legislative history supports this statutory interpretation, " based on other canons).

         2. Analysis

         a. Krstic and Franklin

         The parties have framed the statutory interpretation issue in this case primarily in terms of whether we should follow United States v. Krstic, 558 F.3d 1010 (9th Cir. 2009), or United States v. Franklin, No. CR 07-967 PSG, 2011 WL 3424448 (C.D. Cal. Aug. 5, 2011), aff'd, 501 F.App'x 629 (9th Cir. 2012) (unpubl. mem.). We conclude that Krstic, while relevant to some extent, is not controlling on the issues presented here; that our decision on appeal in Franklin is not controlling; and that we are not convinced by the district court's interpretation of the statute in Franklin.[4] Thus, we must embark on our own statutory interpretation.

         Here, as in Krstic, we are presented with "a classic question of statutory interpretation, " albeit a different one than we addressed in Krstic, and this question requires us to "begin . . . with the text of the statute." 558 F.3d at 1013.

         b. Section 1546(a)

         The text of § 1546(a) provides, in pertinent part, as follows:

(a) Whoever knowingly forges, counterfeits, alters, or falsely makes any immigrant or nonimmigrant visa, permit, border crossing card, alien registration receipt card, or other document prescribed by statute or regulation for entry into or as evidence of authorized stay or employment in the United States, or utters, uses, attempts to use, possesses, obtains, accepts, or receives any such visa, permit, border crossing card, alien registration receipt card, or other document prescribed by statute or regulation for entry into or as evidence of authorized stay or employment in the United States, knowing it to be forged, counterfeited, altered, or falsely made, or to have been procured by means of any false claim or statement, or to have been otherwise procured by fraud or unlawfully obtained [shall be punished as specified.]

18 U.S.C. § 1546(a) (emphasis added). Thomsen's argument that the meaning of this statute is "plain" is belied by our observation in Krstic that, "with this section, Congress has achieved in a single 124-word sentence a level of confusion it usually takes pages to create." 558 F.3d at 1013. The confusion, here, involves the scope of the general or catchall "other document" clauses: Are the "other documents" limited to immigration-related documents, or can they include a U.S. passport or U.S. passport card?[5]

         c. Plain meaning

         i. "Whoever . . ."

         Although the statute is confusing, we are not without guidance. First, we observe that § 1546(a) plainly and expressly applies to "whoever" engages in the proscribed conduct, not just to "any alien." Neal, 776 F.3d at 652. The government argues this means that the statute can apply to documents, such as U.S. passports, used by U.S. citizens, not just to documents used by aliens. It is true that, some time ago, in United States v. Knight, 514 F.2d 1286 (5th Cir. 1975), the court rejected the argument that what is now the third paragraph of § 1546(a)[6] could not be violated by an American citizen. 514 F.2d at 1287. In Knight, the court explained,

We agree with the district court, that the word "whoever" means exactly that. Though Knight is correct in his history, the section in question is no longer within Title 8, but is now in Title 18. Cf. 8 U.S.C.A., ยง 1325 on false or misleading representation ...

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