Decided: June 23, 2014
The Fourth Circuit affirmed the defendant’s convictions for bank fraud and identity theft, and vacated the defendant’s sentence; the Court determined that the Government failed to establish that defendant used sophisticated means, and the district court erred by shifting the burden to the defendant to disprove sophistication.
Defendant was involved in a bank fraud scheme with a government confidential informant (“CI”). The CI opened two bank accounts using false identification documents provided by the defendant. Defendant then provided checks for the CI to deposit, and asked the CI to withdraw the money, and share the proceeds with defendant. The district court applied a two-level enhancement to the bank fraud sentences for using sophisticated means, as required by the U.S. Sentencing Guidelines (U.S.S.G.). The district court determined that because defendant could not show that he used unsophisticated means (i.e. common internet sources) to commit bank fraud, the evidence “reinforces the view that [defendant’s] scheme must have been sophisticated.” Accordingly, the district court applied the sentencing enhancement.
The Fourth Circuit determined that the district court erred in shifting the burden to defendant to disprove the use of sophisticated means. Relying on the axiom that the Government must prove by a preponderance of the evidence the applicability of a sentencing enhancement, the Fourth Circuit determined that the district court erred in applying the sentencing enhancement by failing to rely on any evidence that defendant had used sophisticated means in committing bank fraud.