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United States v. Cornelsen

United States Court of Appeals, Eighth Circuit

June 28, 2018

United States of America Plaintiff- Appellee
Bradley R. Cornelsen Defendant-Appellant

          Submitted: January 12, 2018

          Appeal from United States District Court for the Southern District of Iowa - Council Bluffs

          Before SMITH, Chief Judge, MELLOY and SHEPHERD, Circuit Judges.


         A jury convicted Bradley Cornelsen of five counts of wire fraud, in violation of 18 U.S.C. § 1343. The district court[1] sentenced Cornelsen to 48 months' imprisonment and 3 years' supervised release and ordered him to pay $1, 400, 320.09 in restitution. Cornelsen challenges the district court's calculation of the loss amount and the restitution award. We affirm, except as to the restitution award where we reverse in part and remand for further consideration in light of Lagos v. United States, 138 S.Ct. 1684 (May 29, 2018).

         From 2007 until 2014, Cornelsen was employed by MV Transportation (MVT), a passenger transport company based in Dallas, Texas. He worked in the company's office in Elk Horn, Iowa. In 2010, Cornelsen was named the company's Chief Financial Officer. In April 2014, Cornelsen was terminated and MVT launched an internal review into his corporate activities. After several months of private investigation, which cost the company $763, 746.74, MVT referred the matter to the U.S. Attorney.

         In January 2016, a grand jury indicted Cornelsen on five counts of wire fraud. The indictment charged Cornelsen with defrauding MVT of $297, 985.13 through unauthorized wire transfers made between January 2013 and February 2015.

         At trial, David Oswald, a forensic accounting expert, testified regarding an Ernst & Young (E&Y) audit of Cornelsen's corporate activities. The E&Y audit estimated Cornelsen defrauded MVT of a total of $1, 453, 025.42. Accordingly, the government presented evidence of uncharged, yet related conduct, including unauthorized, non-business expenditures made using manual checks and a company credit card. In November 2016, a jury found Cornelsen guilty on all five counts of wire fraud.

         The Presentence Investigative Report recommended the court find an actual loss amount of $1, 150, 320.09 for purposes of determining the base offense level under United States Sentencing Guidelines § 2B1.1. At sentencing, Special Agent Kevin Kohler, a certified public accountant, testified to the calculations. Kohler used the E&Y audit's $1, 453, 025.42 calculation as a baseline and recommended the court (1) remove a $206, 250.00 personal loan that did not appear to be fraudulent, (2) remove $321, 846.75 in potentially ambiguous vehicle expenditures, and (3) include a $225, 391.42 unauthorized cash bonus from November 2012. After making certain credibility findings and determining the E&Y audit to be a "very conservative" estimate of the actual losses, the district court adopted the recommended loss calculation of $1, 150, 320.09. The court then turned to restitution, awarding $1, 150, 320.09 in losses, as well as $250, 000.00 in attorney and accountant fees, for a total restitution award of $1, 400, 320.09.

         Cornelsen appeals the district court's calculation of the loss amount and restitution award, arguing any amount over the $297, 985.13 stated in the indictment, and any conduct outside of the time period stated in the indictment, cannot be included in either calculation. Cornelsen also argues MVT is not a "victim" under the Guidelines or the Mandatory Victims Restitution Act (MVRA), 18 U.S.C. § 3663A(a)(2).

         Turning first to the calculation of the loss amount, we review the district court's interpretation of the term "loss" under the Guidelines de novo, United States v. Fazio, 487 F.3d 646, 657 (8th Cir. 2007), and its factual findings for clear error, United States v. Bolt, 782 F.3d 388, 390 (8th Cir. 2015). We grant "deference to the district court's loss calculations because of its unique ability to assess the evidence and estimate the loss," Fazio, 487 F.3d at 659 (citations omitted), and require a "reasonable estimate of loss rather than a precise determination," United States v. Farrington, 499 F.3d 854, 860 (8th Cir. 2007). The government must establish the loss amount by a preponderance of the evidence. Id. at 859.

         The Guidelines' commentary defines "loss" as "the greater of actual loss or intended loss." U.S.S.G. § 2B1.1 cmt. n.3(A); see id. (defining actual loss as "the reasonably foreseeable pecuniary harm that resulted from the offense" and defining intended loss as "(I) . . . pecuniary harm that the defendant purposefully sought to inflict; and (II) . . . intended pecuniary harm that would have been impossible or unlikely to occur"). The commentary also clearly defines a "victim" as "any person who sustained any part of the actual loss," with "person" including "individuals, corporations, companies, associations, [and] firms." U.S.S.G. § 2B1.1 cmt. n.1. Based on § 2B1.1 and the associated commentary, we conclude the district court correctly determined MVT was a victim and suffered actual and intended pecuniary losses as a result of Cornelsen's fraudulent activities.

         Furthermore, "we take a broad view of what conduct and related loss amounts can be included in calculating loss." United States v. DeRosier, 501 F.3d 888, 896 (8th Cir. 2007). "Relevant conduct under the guidelines 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) (quoting U.S.S.G. § 1B1.3(a)(2)); see also United States v. Boesen, 541 F.3d 838, 850-51 (8th Cir. 2008) (affirming a district court's loss calculation under U.S.S.G. § 2B1.1 when the court included unindicted criminal activity). To constitute a "common scheme or plan," two or more offenses "must be substantially connected to each other by at least one common factor, such as common victims, common accomplices, common purpose, or similar modus operandi." U.S.S.G. § 1B1.3 cmt. n.5(B)(i). "Offenses that do not qualify as part of a common scheme or plan may nonetheless qualify as part of the same course of conduct if they are sufficiently connected or related to each other as to warrant the conclusion that they are a part of a single episode, spree, or ongoing series of offenses." U.S.S.G. § 1B1.3 cmt. n.5(B)(ii).

         We conclude the district court did not commit clear error in finding that the uncharged conduct, including the unauthorized use of manual checks and credit card charges, was a part of Cornelsen's common scheme or plan or the same course of conduct. As the court reasonably relied on the E&Y audit and ...

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