United States District Court, E.D. Arkansas, Western Division
KRISTINE G. BAKER, UNITED STATES DISTRICT JUDGE.
Court has received and reviewed the Presentence Investigation
Report (“PSR”) for defendant Lynn Espejo. The
Court also has received and reviewed Ms. Espejo's
objections to the PSR, the Probation Office's responses
to those objections, and Ms. Espejo and the United
States' sentencing memoranda (Dkt. Nos. 180, 181).
Further, the Court heard argument at the initial sentencing
hearing conducted in this matter on September 22, 2017 (Dkt.
No. 182). Based on the Court's consideration of those
items, as well as the testimony and evidence presented at the
trial, the Court issues the following Tentative Findings. The
Court advises the parties that these Tentative Findings are
issued with the understanding that, pursuant to United
States v. Booker, 543 U.S. 220 (2005), the sentencing
guidelines are advisory.
Objection to Loss Calculation
Espejo objects to the loss calculation and resulting 14-level
enhancement set forth in the PSR pursuant to the United
States Sentencing Guideline (“USSG”) §
2B1.1(b)(2), (Dkt. No. 180, at 2). Ms. Espejo asserts that
the amount of loss is the actual loss of $285, 459.86 for
which she was charged in the indictment and ultimately
convicted (Id., at 3).
general rule, the amount of loss under the USSG is the
greater of actual loss or intended loss. See
United States Sentencing Commission, Guidelines Manual,
§ 2B1.1 cmt. n. 3(A) (Nov. 2016) (“USSG
Manual”); United States v. Parish, 565 F.3d
528, 534 (8th Cir. 2009). Actual loss is defined as the
reasonably foreseeable pecuniary harm that resulted from the
offense, and intended loss is defined as the pecuniary harm
that was intended to result from the offense. USSG Manual
§ 2B1.1 cmt. n. 3(A)(i)-(ii). Because it is often
difficult to calculate the precise amount of loss in a fraud
case, “a district court's determination of loss
need not be precise, although it must reflect a reasonable
estimate of the loss.” United States v.
Boesen, 541 F.3d 838, 851 (8th Cir. 2008); USSG Manual
§ 2B1.1 cmt. n. 3(C). The burden of proving the extent
of the loss at sentencing falls on the government; the
government must prove the extent of loss by a preponderance
of the evidence. United States v. Mills, 987 F.2d
1311, 1315 (8th Cir. 1993).
sentencing court must include in its calculation any losses
caused by “relevant conduct.” United States
v. Quevedo, 654 F.3d 819, 823 (8th Cir. 2011). This
includes charged and uncharged conduct that was “part
of the same course of conduct or common scheme or plan as the
offense[s] of conviction.” Id. (citing
United States v. McIntosh, 492 F.3d 956, 960-61 (8th
Cir. 2007)). Relevant conduct under the USSG need not be
charged to be considered in sentencing, and it includes all
acts and omissions that were part of the same course of
conduct or common scheme or plan as the offense of
conviction. United States. v. Radtke, 415 F.3d 826,
841 (8th Cir. 2005). Courts are not limited to loss amounts
proven at trial in their calculation. United States v.
Jokhoo, 806 F.3d 1137, 1141 (2015). Relevant conduct may
include conduct that predates that charged in the indictment
and conduct that is committed outside the relevant statute of
limitations period. See e.g., United States v.
Cousineau, 929 F.2d 64, 68 (2d Cir. 1991); United
States v. Silkowski, 32 F.3d 682, 688 (2d Cir. 1994);
United States v. Lokey, 945 F.2d 825, 840 (5th
presentence memorandum, Ms. Espejo objects to the PSR loss
calculation of $611, 099.41; she claims this figure is the
result of erroneously adding the money laundering amounts to
the wire fraud amounts (Dkt. No. 180, at 3). At the
sentencing hearing, Ms. Espejo objected to the incorporation
of funds transferred from PMSI and BMSI to her personal
accounts prior to November 2009 as outside the statute of
limitations period. However, the Court concludes that $611,
099.41 is the sum of the amounts transferred from PSMSI and
BMSI to Ms. Espejo's personal accounts over the course of
her employment at PMSI and not the result of double counting
funds to arrive at a loss amount. The Court further finds
that it can include the pre-indictment transfers from PSMSI
and BMSI to Ms. Espejo's personal accounts as relevant
such, the Court tentatively determines that the government
has proven by a preponderance of the evidence that the amount
of loss is $611, 099.41. The testimony of Internal Revenue
Service (“IRS”) Agent John Shortway, and
corresponding audit trail and certified bank records,
presented at trial showed that Ms. Espejo transferred the
following amounts from PMSI and BMSI accounts to her personal
accounts: $148, 371.97 in 2007, $103, 267.21 in 2008, $149,
034.45 in 2009, and $210, 425.41 in 2010 (Dkt. No. 160, at
661). Evidence at trial, which the jury found credible,
further showed that Ms. Espejo was at no time authorized to
transfer money from PMSI and BMSI accounts to her personal
Court concludes that all of the transfers are relevant
conduct for this Court to consider in sentencing Ms. Espejo.
The Court tentatively determines that the government has
proven by a preponderance of the evidence that the 14-level
enhancement is warranted pursuant to U.S.S.G. §
2B1.1(b)(1)(H) and overrules Ms. Espejo's objections
related to loss amount.
Objection to Tax Calculation
Espejo objects to the tax loss calculation set forth in
paragraph 26 of the PSR. She argues that the tax loss
calculation is erroneous and should be calculated based on
the amount she was convicted of defrauding PMSI, or $285,
fraud convictions under 26 U.S.C. § 7206(1) are
addressed in U.S.S.G. § 2T1.1. Section 2T1.1 provides a
base offense level obtained from the tax tables at §
2T4.1 based upon the tax loss. The offense level is based on
the tax loss attributable to the defendant's conduct.
“Relevant conduct for sentencing is viewed broadly:
‘In determining the total tax loss attributable to the
offense . . ., all conduct violating the tax laws should be
considered as part of the same course of conduct or common
scheme or plan unless the evidence demonstrates that the
conduct is clearly unrelated.'” United States
v. Ervasti, 201 F.3d 1029, 1042 (8th Cir. 2000) (quoting
USSG Manual § 2T1.1(c)(1), cmt. n.2). Tax loss is
“the total amount of loss that was the object of the
offense.” U.S.S.G. § 2T1.1(c)(1). The government
has the burden at sentencing to prove tax loss by a
preponderance of the evidence. United States v.
Tucker, 217 F.3d 960, 961 (8th Cir. 2000). The amount of
the tax loss may be made based on a reasonable estimate from
the available facts. Ervasti, 201 F.3d at 1042.
the United States has submitted evidence, including the
testimony of IRS Agent Kim Johnson who reviewed Ms.
Espejo's tax filings for the years 2007 through 2010.
Agent Johnson concluded that the total additional tax due
from Ms. Espejo was $207, 941.00 (Dkt. No. 160, at 663).
Further, the Court determines that all of the transfers from
PMSI and BMSI to Ms. Espejo's personal accounts are
relevant conduct. A tax loss of greater than $100, 000.00 and
less than $250, 000.00 results in an offense level of 16.
USSG Manual § 2T4.1. The Court determines that the
government has proven by a preponderance of the evidence that
the tax loss calculation set forth in the PSR is correct. The
Court tentatively overrules Ms. Espejo's objection to the
tax loss calculation and imposes an offense level of 16 for
the offense of filing false or fraudulent tax returns.
Objection To Obstruction Of Justice Enhancement
Espejo objects to the two-level enhancement for obstruction
of justice set forth in paragraphs 23 and 30 of the PSR
pursuant to USSG § 3C1.1. In addition, Ms. Espejo
objects to the factual allegations set forth in paragraphs 11
and 15 of the PSR related to the adjustment for obstruction
of justice. When a defendant objects to specific factual
allegations contained in the PSR that the government relies
on to establish a sentencing enhancement, the government must
then prove by a preponderance of the evidence those
allegations. United States v. Razo-Guerra, 534 F.3d
970, 975 (8th Cir. 2008). Assuming that the specific factual
allegations to which Ms. Espejo objects are relied on by the
government to establish a sentencing enhancement, the Court
turns to determining whether the government has proven those
allegations by a preponderance of the evidence.
The two-level sentencing enhancement for obstruction of
justice applies if the defendant willfully obstructed or
impeded, or attempted to obstruct or impede, the
administration of justice with respect to the investigation,
prosecution, or sentencing of the instant offense of
conviction, and (2) the obstructive conduct related to (A)
the defendant's ...