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U.S. v. WEISS, NO. 13-4039

Decided: June 6, 2014

The Fourth Circuit affirmed the United States District Court for the Middle District of North Carolina and held that: 1) a defendant’s false representation of himself as a certified public accountant (CPA) warranted an increase of two levels in his base offense level for sentencing by his abuse of a position of trust; 2) a defendant could be held accountable at sentencing for knowingly and intentionally failing to claim his illegally acquired gains as income; and 3) the district court did not plainly err by not appointing various experts sua sponte to assist in his defense at sentencing.

The defendant, who headed up a payroll processing company, was convicted of abuse of a position of trust after his convictions for wire fraud, money laundering, and corrupt interference with the United States’ internal revenue laws.  The presentence report (PSR) calculated Weiss’ total offense level under the U.S. Sentencing Guidelines (the U.S.S.G.) at thirty-three, which included a two-level enhancement for the abuse of a position of trust.  The offense level of thirty-three included twenty levels for the loss attributable to the defendant.

The Court upheld the two-level enhancement and reasoned that “[t]he central purpose of [the applicable rule] is to penalize defendants who take advantage of a position that provides them with the freedom to commit a difficult-to-detect wrong.”  The Court found that the defendant’s false representation of himself as a CPA reasonably induced at least one company to do business with him as a professional employer organization (PEO), and caused it to repose a higher level of trust or confidence in him, which is statutorily required to increase his sentencing offense level by two levels.

The Court further agreed with the district court that the personal federal income tax due on the defendant’s illegal gains could be included as part of the loss calculation under the U.S.S.G., in addition to the illegal gain.  The Court noted that the district court’s reasoning was “on the money.”  Specifically the Court stated that the defendant’s first offense was complete when he fraudulently diverted income to himself.  Thus, when he also knowingly and intentionally failed to report such ill-gotten income as income on his federal income tax return, he committed a second, and distinct, offense.

On appeal, the defendant further claimed that the district court abused its discretion by failing sua sponte to appoint him various experts to assist in his defense at his sentencing.  Because the defendant never requested any of the expert assistance that he claimed on appeal was crucial to his ability to mount a successful defense at sentencing, the Court’s review was limited to plain error.  On this standard, the Court held that even assuming arguendo that defendant could establish error as he alleged, there was still no basis to conclude that such error was plain.  Accordingly, the Court concluded that the defendant was not entitled to relief on his claim for various experts on appeal, when he never made known to the district court.

Full Opinion

Abigail Forrister