United States v. Joyce Allen , 712 F. App'x 527 ( 2017 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 17a0606n.06
No. 15-5525 FILED
Nov 02, 2017
UNITED STATES COURT OF APPEALS DEBORAH S. HUNT, Clerk
FOR THE SIXTH CIRCUIT
UNITED STATES OF AMERICA, )
)
Plaintiff-Appellee, )
) ON APPEAL FROM THE
v. ) UNITED STATES DISTRICT
) COURT FOR THE EASTERN
JOYCE E. ALLEN, ) DISTRICT OF TENNESSEE
)
Defendant-Appellant. )
)
BEFORE: KEITH, McKEAGUE and STRANCH, Circuit Judges.
DAMON J. KEITH, Circuit Judge. Defendant Joyce E. Allen (“Allen”) appeals her
convictions of one count of conspiracy to commit mail fraud and wire fraud, in violation of 18
U.S.C. § 1349, one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349,
two counts of conspiracy to commit money laundering, in violation of 18 U.S.C. § 1956(h), and
six counts of uttering fraudulent securities, in violation of 18 U.S.C. § 513(a). On appeal, Allen
argues that: (1) the evidence was insufficient to support her convictions; (2) the district court
erred in instructing the jury on “deliberate ignorance”; and (3) the sentence imposed by the
district court is procedurally and substantively unreasonable and excessive. For reasons set forth
below, we AFFIRM.
I. BACKGROUND
Beginning in 2001, a Knoxville, Tennessee-based corporation known as Benchmark
Capital, Inc. (“Benchmark”) was used to defraud would-be investors and obtain their money.
The operators of Benchmark fraudulently induced their victims to purchase “investments”
No. 15-5525, United States v. Allen
through Benchmark. However, rather than purchasing the advertised investments, the
Benchmark operators converted victims’ funds to personal use. The maintenance of this scheme
depended on the constant recruiting of new victims in order to afford quarterly “investment
returns” payments to existing victims. Simply put, Benchmark operated a “Ponzi scheme”.
In 2002, Benchmark hired Allen, an independent insurance agent, to sell its “annuity
investments.” Over the next 10 years, Allen sold Benchmark products to numerous victims. In
2012, the head of Benchmark, Charles Candler (“Candler”), committed suicide in the midst of an
investigation conducted by the Securities and Exchange Commission (“SEC”). Thereafter,
federal agents executed search warrants at Candler’s and Allen’s offices, which led to the
uncovering of the criminal scheme.
In a third superseding indictment, Allen was indicted on ten counts: one count of
conspiracy to commit mail fraud and wire fraud, in violation of 18 U.S.C. § 1349, one count of
conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, two counts of conspiracy to
commit money laundering, in violation of 18 U.S.C. § 1956(h), and six counts of uttering
fraudulent securities, in violation of 18 U.S.C. § 513(a).
At the subsequent seven-day trial, the jury heard testimony from over thirty witnesses,
including Allen, and viewed dozens of exhibits. After the close of the government’s presentation
of evidence, Allen moved for a judgment of acquittal pursuant to Federal Rule of Criminal
Procedure 29. The district court denied the motion. After the close of all the evidence, and
before closing arguments were made, Allen renewed her Rule 29 motion. The district court
again denied the motion. The jury found Allen guilty of all counts.
On April 20, 2015, the district court sentenced Allen to a prison term of 360 months. On
May 12, 2015, Allen appealed, arguing that: (1) the evidence presented at trial was insufficient to
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support her convictions; (2) the district court erred in instructing the jury on “deliberate
ignorance”; and (3) the sentence imposed by the district court is procedurally and substantively
unreasonable and excessive under 18 U.S.C. § 3553.
II. DISCUSSION
A. Sufficiency of the Evidence
Allen first argues that the district court erred in denying her Rule 29 motion because the
evidence presented at trial was insufficient to support her convictions. We review a challenge to
the sufficiency of the evidence de novo. United States v. Garcia, 758 F.3d 714, 718 (6th Cir.
2014) (citation omitted). However, “[w]e can neither independently weigh the evidence, nor
make our own assessment of the credibility of the witnesses who testified at trial.” Id. (internal
citation omitted). Instead, “the critical inquiry . . . [is] to determine whether the record evidence
could reasonably support a finding of guilt beyond a reasonable doubt.” Jackson v. Virginia,
443 U.S. 307, 318 (1979). “[T]he relevant question is whether, after viewing the evidence in the
light most favorable to the prosecution, any rational trier of fact could have found the essential
elements of the crime beyond a reasonable doubt.” Id. at 319 (emphasis in original).
This court “will reverse a judgment for insufficiency of evidence only if this judgment is
not supported by substantial and competent evidence upon the record as a whole, and . . . this
rule applies whether the evidence is direct or wholly circumstantial.” United States v. Stone,
748 F.2d 361, 363 (6th Cir. 1984). “It is not necessary for the evidence to exclude every
reasonable hypothesis except that of guilt.” United States v. Beddow, 957 F.2d 1330, 1334 (6th
Cir. 1992) (citation omitted).
“The general hesitancy to disturb a jury verdict applies with even greater force when a
motion of acquittal has been thoroughly considered and subsequently denied by the trial judge.”
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United States v. Lee, 359 F.3d 412, 418–19 (6th Cir. 2004). “Indeed, a defendant bears a ‘very
heavy burden’ when he challenges the sufficiency of the evidence, lest the matter of his guilt be
re-litigated.” United States v. Owens, 426 F.3d 800, 808 (6th Cir. 2005) (quoting United States
v. Spearman, 186 F.3d 743, 746 (6th Cir. 1999)) (internal citation omitted).
1. Conspiracy Crimes
Allen was convicted of one count of conspiracy to commit mail fraud and wire fraud, and
one count of conspiracy to commit wire fraud, both in violation of 18 U.S.C. § 1349. Allen was
also convicted of two counts of conspiracy to commit money laundering, in violation of
18 U.S.C. § 1956(h).
In order to establish the crime of conspiracy, the government must demonstrate that “two
or more persons conspired, or agreed, to commit the [substantive] crime . . . and that the
defendant knowingly and voluntarily joined the conspiracy.” United States v. Rogers, 769 F.3d
372, 377 (6th Cir. 2014)).1
In appealing her conspiracy convictions for insufficiency of the evidence, defense
counsel argues, “It is apparent from the proof Allen was not aware Benchmark was a Ponzi
scheme. She was deceived and used by Candler. . . . While the prosecution highlighted several
facts consistent with its theory, and established that Allen’s reliance on Candler’s representations
was unwise and foolish, the weight of the evidence regarding Allen’s [sic] knew Benchmark was
fraudulent predominates against the jury’s verdict.” Allen’s main contention, therefore, involves
the second essential element of the conspiracy crime—whether she knowingly joined the existing
conspiracies to commit mail fraud, wire fraud, and money laundering.
1
For conspiracy offenses in violation of 18 U.S.C. §§ 1349 , 1956(h), “the United States Supreme Court has
disavowed the need for proof of an overt act in furtherance of [the] conspiracies . . . .” Rogers, 769 F.3d at 381; see
also Committee Commentary to Sixth Circuit Pattern Criminal Jury Instruction 3.01A.
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“Once a conspiracy is shown beyond a reasonable doubt however, a defendant’s
connection to the conspiracy ‘need only be slight.’ Moreover, a defendant’s knowledge of and
participation in a conspiracy may be inferred from his conduct and established by circumstantial
evidence.” United States v. Martinez, 430 F.3d 317, 330 (6th Cir. 2005) (quoting United States
v. Avery, 128 F.3d 966, 971 (6th Cir. 1997)) (internal citations omitted).
One means of establishing a defendant’s knowledge is the concept of “deliberate
ignorance.” In order to use “deliberate ignorance” to establish that a defendant knowingly joined
a conspiracy, it must be proven that the defendant “deliberately ignored a high probability that
[the illegal activity was occurring] . . . .” Pattern Crim. Jury Instr. 6th Cir. 2.09 (2013 ed.).
In other words, it must be proven that “the defendant deliberately closed his eyes to what was
obvious.” Id.
A review of the trial transcript reveals that the prosecution introduced abundant
circumstantial evidence, relying on the jury to infer Allen’s active participation in the
conspiracy, or her “deliberate ignorance” of it, from her conduct. As previously stated, our task
is to view this evidence in the light most favorable to the prosecution and determine whether
such evidence could have reasonably led a rational jury to find that Allen knowingly joined the
conspiracy. Due to the fact that most of the prosecution’s evidence was circumstantial, a
somewhat detailed review of the most salient evidence is required to understand the grounds on
which the jury made its findings.
a. Allen’s experience and Benchmark’s operations
The jury heard evidence relating to Allen’s years of work experience in tax preparation,
accounting, and selling insurance and annuities. In order to be licensed to sell insurance
products and annuities, Allen took a state licensing exam and completed periodic “continuing
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No. 15-5525, United States v. Allen
education” courses throughout the years she was licensed. Allen worked in the industry and held
her insurance license for approximately fifteen years before she was invited to sell annuities for
Benchmark.
At trial, Allen testified that she believed Candler when he falsely told her that Benchmark
was a large national corporation headquartered in Chicago, and that he represented the
company’s southeast region. However, Allen also testified that she never spoke to anyone from
the Chicago headquarters, never received training or promotional materials from the Chicago
headquarters, and never received any paperwork from Chicago confirming that she, as an
independent agent, was authorized to sell Benchmark products. Allen testified that, based on her
years of experience with other companies, she knew this was unusual.
Allen testified that, in her experience, other companies’ applications required prospective
investors to fill out around 15 pages of information so that they could be properly vetted for
legitimate investments, but Benchmark’s application consisted of only one page. The
prosecution presented evidence that every one of these one-page applications listed the same
“Deposit Control Number”—a number that is supposed to be unique to each application so as to
differentiate between applicants. The top of each application read, “Deposit Control Number
NAOO 165466.” However, the six-digit number at the end appeared in a different font,
suggesting that it was unique to that application form. Allen testified that, in her ten years at
Benchmark, she had somehow never noticed that.
Allen also testified that she received her sales commissions by writing checks to herself
from an account that Candler set up, funded with $75,000 of his personal funds, and to which he
made her a signatory. She testified that she believed the Chicago headquarters paid her
commissions to Candler, and that Candler had made this separate account so that she could draw
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her commissions herself. When asked, she admitted that none of the other companies for whom
she’d sold products had ever operated in this way. She testified that she believed the company’s
policy dictated such an arrangement, despite having never received any policy materials from the
supposed headquarters in Chicago.
b. Munsey lawsuit
The jury also heard evidence related to a 2008 lawsuit brought by Teresa Munsey
(“Munsey”), who claimed that Allen ignored her requests to withdraw the funds her family had
invested in Benchmark. Munsey’s complaint also alleged, inter alia, that: 1) neither Candler nor
Benchmark was licensed to sell insurance products in Tennessee; 2) the corporation known as
“Benchmark Capital” had been dissolved by the State of Tennessee in 2002; 3) there was no
“Benchmark Capital” registered in Illinois as conducting business in Tennessee; 4) Benchmark’s
marketing materials and website were fraudulently advertising that Benchmark was a member of
a non-existing entity called “North American Association for Life and Health,” in an effort to
mislead others into confusing it with the legitimate North American Company for Life and
Health Insurance; 5) Candler and Allen committed fraud by entering into an unlawful annuity
contract and then refusing to return funds as required by the contract; and 6) Candler and Allen
were selling unlicensed insurance products and fraudulently misrepresenting their products.
Allen was a named defendant in this lawsuit, and she testified that she kept a copy of the
paperwork containing these allegations; the paperwork was found in her office when law
enforcement searched it in 2012. When asked about her response to these allegations, Allen
testified that she ignored them and called Candler so he could deal with the lawsuit.
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No. 15-5525, United States v. Allen
c. TDCI investigation
The jury also heard evidence that Munsey’s lawsuit triggered an investigation by the
Tennessee Department of Commerce and Insurance (“TDCI”), a state agency that issues licenses
to sell insurance and investigates insurance fraud. In July 2008, the TDCI sent Allen a letter
asking her to appear at TDCI offices to be interviewed, and to bring certain documents related to
the insurance products she was selling. Allen did not appear, and the interview was rescheduled
two more times. After Allen failed to appear the third time, the TDCI issued a subpoena for her
to appear and bring the requested documentation.
Allen testified that she told Candler about the subpoena and that he said she did not need
to comply because the only consequence for her noncompliance would be the revocation of her
license to sell insurance. According to Allen, this did not concern her because Candler told her
she would still be licensed “through Benchmark.” Allen testified that she blindly believed
Candler’s lie, despite its being at odds with her 23 years of experience as a licensed insurance
salesperson, including the initial licensing test and the periodic continuing education courses she
had completed. Her supposed lack of suspicion about this lie is also at odds with the fact that the
Munsey lawsuit had specifically put her on notice of allegations that Benchmark had no such
license.
In November 2009, after notifying Allen, the TDCI held a hearing at which Allen again
failed to appear. As a result, the TDCI revoked Allen’s license. Allen did not appeal the
revocation. Nevertheless, Allen continued to sell Benchmark products. When asked about the
fact that every victim’s application was missing the required insurance license number, Allen
testified that she did not think there was a problem because Candler assured her everything was
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fine. Again, this supposed belief in Candler’s lies is at odds with her knowledge of, and
extensive experience in, the insurance industry.
The jury also heard evidence that contradicted Allen’s testimony on this topic. Allen’s
former associate testified that, in 2010, Allen directed an employee to take an insurance course
and obtain an insurance license. The associate testified that Allen stated, “We just need someone
in here that has an insurance license.” This contradicts Allen’s testimony that she believed the
personnel in her office were allowed to sell insurance products under the license she supposedly
believed Benchmark held. In the end, that employee did not obtain an insurance license.
Nevertheless, there was evidence presented that Allen continued to sell Benchmark products
until a few weeks before law enforcement officers executed their search warrants in early 2012.
d. Barkhursts
The jury also heard evidence that the TDCI investigation caused the Barkhursts,
Benchmark investors, to become concerned. Prior to the TDCI investigation, the Barkhursts had
already experienced a troubling encounter with Allen. The Barkhursts had first purchased
Benchmark products from Allen and one of her associates, Joan Black (“Black”), long before the
TDCI investigation. After Black stopped selling Benchmark products and separated from Allen,
the Barkhursts continued to do business with Black. Black sold the Barkhursts what she claimed
was the same type of annuities that she had sold them when she was working with Allen. After
several months, the Barkhursts stopped receiving payments from Black, prompting them to file a
police report. They then learned that Black’s “investments” were actually part of a Ponzi
scheme. Mr. Barkhurst testified that, when he notified Allen of the things he had learned about
Black, Allen replied that they should have informed her instead of going to the police so that she
and Candler could have handled it “in-house.”
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No. 15-5525, United States v. Allen
Having had this prior experience, the Barkhursts contacted the TDCI investigator in
Allen’s case when they became aware of the TDCI investigation. Upon learning that Allen’s
license had been revoked and that Benchmark was not licensed to sell insurance products, the
Barkhursts sent a letter to Allen requesting evidence of which companies were holding the
Barkhursts’ investments. The Barkhursts never received any such evidence. Instead, Allen and
Candler held a meeting with the Barkhursts, during which Allen falsely told them that she had
been to Chicago and met with the owners of Benchmark many times. The jury also heard
testimony that Allen told a similar lie to at least two other Benchmark customers.
e. Moore letter
The jury also heard evidence regarding Lori Moore (“Moore”) and her experience selling
Benchmark products for Allen in Florida. Moore, a Florida accountant, testified that she became
concerned about the operations of the business after working for Allen for approximately two
months. She stated that she attempted to contact Allen many times about her concerns, but was
ignored. At trial, the prosecution introduced an April 2011 letter that Moore sent to Allen, in
which she stated:
I have made several attempts to get basic questions answered by your firm such as
the following:
1. What is your license number?
2. What states are you licensed in to sell Annuities?
3. What is the name of the agent or agency appointed with the insurance
commissioner and their insurance license number?
4. How come I can sign these documents and not be required to have a
license in the State of Florida, for which Charles Candler has repeatedly
told me there was none required?
5. Is J. Allen and Associates licensed to do business in Florida and if so
under what business name are you using?
6. Why would the application state that it is being signed in Alcoa, TN
when it is really being signed in Florida?
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No. 15-5525, United States v. Allen
7. When you sign the application, why does it only have your company
name and address under the license number, and not an actual license
number? Where is the license number?
Anybody that is involved in the insurance business and properly licensed to
perform these services would not hesitate to give these straight forward answers
to my questions or to any client. Although, still to this date I have not been given
any straight forward answers to these questions. When I call Benchmark Capital I
only get voicemail recordings and no return phone calls back. Why is it that when
I call Benchmark Capital in Illinois that Charles Candler is listed as a
representative and has a voicemail with Benchmark Capital? Another question
arises, why would and how is Charles Candler involved with Benchmark Capital
in Chicago Illinois?
Due to the insufficient answers from your company regarding these questions, I
have done my own independent research into licenses requirements for all parties
involved with the State Insurance Commissioners from Florida, Tennessee and
Illinois. I have not been able to verify any licenses information on J. Allen and
Associates Inc, Charles Candler, Benchmark Capital (BCS) or any individuals
associated with these corporations. . . .
I have been misinformed and mislead by Charles Candler and J. Allen and
Associates Inc, regarding the requirements on licensing. I was informed by
Charles Candler on several occasions that no licenses were needed by me to
perform the application process. After contacting the State Insurance
Commissioners in Florida, Tennessee and Illinois, the answer became totally
apparent that a license is required by all parties involved in the process of
completing applications and selling annuities in all states involved that the parties
are located in.
. . . Due to the misleading and lack of information to the questions that I have
asked of J. Allen and Associates Inc, Charles Candler and Benchmark Capital
(BCS) I do not feel confident or comfortable doing any type of business with your
company. Therefore, I wish to no longer be affiliated or associated with your
business practice in any way.
Allen testified that she skimmed Moore’s letter, but ultimately did not pay “much
attention” to it. Allen never responded to Moore.
f. Mahers
The jury also heard evidence that Moore sold Benchmark products to William Joseph and
Rogene Maher, a Florida couple. Around the time Moore sent her letter to Allen in April 2011,
she shared her concerns with the Mahers. The Mahers testified that they received the same
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No. 15-5525, United States v. Allen
promise from Allen that Munsey alleged in her lawsuit—that the investment funds could be
withdrawn at any time. In April 2011 the Mahers wrote a letter to Allen and Candler, requesting
the return of their investments funds. They received no response.
In May 2011, the Mahers drove to Tennessee to meet with Allen and Candler in order to
get their investment funds returned to them. In response to their request, Candler threatened to
“lock up the money with the IRS” so that the Mahers would not be able to access it for several
years. Allen was present in this meeting, but did not say anything.
The Mahers met with Allen several more times in an attempt to withdraw some of their
principal investment, but Allen convinced them that, for tax purposes, it would be better to wait.
The Mahers testified that Allen gave them a signed “100% guarantee” document, promising that
her company would guarantee their investment; the prosecution entered this document into
evidence at trial. When questioned, Allen admitted that she gave “100% guarantee” documents
to multiple investors but never had any intention of fulfilling those guarantees. The Mahers were
never able to withdraw their principal investment.
g. SEC investigation
The jury also heard evidence related to the SEC’s investigation that eventually uncovered
this scheme. In January 2012, the SEC contacted Candler and requested information on all
investments offered by Benchmark, entities that had custody of the invested funds, investors and
the amounts they invested, investment records, bank statements, etc. Thereafter, Candler
stopped depositing customers’ checks into the Benchmark bank account. Around the same time,
at Candler’s direction, Allen told her assistant to open a new bank account at Regions Bank and
to deposit several checks that Candler had given her.
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No. 15-5525, United States v. Allen
On March 1, 2012, Candler committed suicide. The next morning, Allen learned of
Candler’s death. Shortly thereafter, Allen asked her assistant to go to the bank and cash Allen’s
personal commission checks. Her assistant testified that this seemed strange because Allen had
always wanted her checks deposited, rather than cashed. Later, Allen directed her assistant to
withdraw over $900,000 from the new Regions Bank account and have the bank issue cashier’s
checks in different amounts for Allen, Allen’s husband, Allen’s assistant, and some family and
friends.
Later that same day, law enforcement executed a search warrant at Allen’s office. The
jury heard testimony that, when asked to name all her business and personal bank accounts, she
omitted the Regions Bank account. When law enforcement discovered evidence of the account’s
existence and confronted Allen, she admitted that Candler had directed her to open that account
and deposit customers’ funds into it. She also admitted that she had withdrawn the money and
gotten cashier’s checks made that very day. She told law enforcement that she had fraudulently
taken that money.
h. Analysis
The foregoing represents only a fraction of the evidence presented in Allen’s trial. We
find that this evidence, viewed in the light most favorable to the prosecution, could reasonably
have led a rational trier of fact to find, beyond a reasonable doubt, that Allen knowingly took
part in the alleged conspiracies, whether through active participation or deliberate ignorance.
2. Uttering Fraudulent Securities
Allen was convicted of six counts of uttering fraudulent securities, in violation of 18
U.S.C. § 513(a) (“§ 513”). Section 513(a) criminalizes the uttering of counterfeited securities
“of an organization . . . .” 18 U.S.C. § 513(a). “[T]he term ‘organization’ means a legal entity,
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No. 15-5525, United States v. Allen
other than a government, established or organized for any purpose, and includes a corporation,
company, association, firm, partnership, . . . or any other association of persons which operates
in or the activities of which affect interstate or foreign commerce . . . .” 18 U.S.C. § 513(c)(4).
Allen argues that the evidence is insufficient as a matter of law to support her § 513(a)
convictions because Benchmark was a fictitious entity and, therefore, could not constitute an
“organization” operating in interstate commerce.
Allen cites our previous decision in United States v. Wade, in which the defendant was
convicted of passing checks that bore the names of fictitious, non-existent entities but contained
the legitimate account numbers of legal entities. United States v. Wade, 266 F.3d 574, 577-78
(6th Cir. 2001). There, we stated that “fictitious entities are not organizations under 18 U.S.C.
§ 513(a).” Id. at 581. As support, Allen also cites United States v. Barone, a Ninth Circuit case
holding that non-existent shell companies could not qualify as “organizations” because they “did
not affect interstate commerce.” United States v. Barone, 71 F.3d 1442, 1443-44 (9th Cir. 1995).
Here, in contrast, Benchmark had offices, active bank accounts, and employees. There
was also evidence that Benchmark solicited interstate business through a website, conducted
business through interstate mail and electronic mail, and made payments through checks and
wire transfers. Accordingly, we find that Benchmark qualified as an “organization” that affected
interstate commerce, in accordance with § 513(a).
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B. Jury Instruction
Allen next argues that the district court erred in instructing the jury on “deliberate
ignorance.” “We review a district court’s choice of jury instructions according to an abuse
discretion standard.” United States v. Beaty, 245 F.3d 617, 621 (6th Cir. 2001). The district
court instructed the jury as follows:
One more thing about proving a defendant’s knowledge. No one can avoid
responsibility for a crime by deliberately ignoring the obvious. If you are
convinced that the defendant deliberately ignored a high probability that
Benchmark was a fraudulent scheme and that funds received by Benchmark were
not actually being invested, then you may find that she knew Benchmark was a
fraudulent scheme and that funds received by Benchmark were not actually being
invested, unless she actually believed to the contrary.
To find deliberate ignorance, you must be convinced beyond a reasonable doubt
that the defendant was aware of a high probability that Benchmark was a
fraudulent scheme and that funds received by Benchmark were not actually being
invested, and that the defendant deliberately closed her eyes to what was obvious.
Carelessness, or negligence, or foolishness on her part is not the same as
knowledge, and is not enough to convict. This, of course, is all for you to decide.
Allen argues that the district court erred in denying her requests to amend the instruction.
Allen requested that the jury be instructed that Allen’s actual belief in Benchmark as a legitimate
operation could be a defense to the conspiracy charges. Allen also requested that the instructions
state that the defendant would have had to take “deliberate actions” to avoid confirming the high
probability of illegality, rather than merely stating that the defendant “closed her eyes.” Allen
argues that giving the instruction without these additions effectively does away with the mens
rea requirement of knowledge, allowing a conviction on the basis of mere negligence. See
Glob.-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 769 (2011) (holding that a finding of
deliberate ignorance requires the defendant to “take deliberate actions to avoid learning of
[wrongdoing].”).
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We addressed this same argument in United States v. Reichert, stating:
Reichert argues that the instruction failed to properly reflect that a defendant is
willfully blind only if he took ‘deliberate action’ to avoid actual knowledge.
[Citation to Global–Tech Appliances, Inc.]. But Reichert is incorrect. The
deliberate ignorance instruction given in this case tracks the language of Sixth
Circuit Pattern Criminal Jury Instruction § 2.09. The pattern instruction explicitly
incorporates the requirement that a defendant act “deliberately” to avoid full
knowledge, and we have “repeatedly” held the instruction to be an accurate
statement of the law.
United States v. Reichert, 747 F.3d 445, 451 (6th Cir. 2014) (citing United States v. Mitchell,
681 F.3d 867, 876 n.51 (6th Cir. 2012)).
Allen agrees that the district court substantially followed the Sixth Circuit Pattern Jury
Instruction on “deliberate ignorance.” Therefore, we find that the district court did not abuse its
discretion in denying Allen’s requested amendments to the instruction.
Allen also argues that the “deliberate ignorance” instruction was prejudicial to her
because it was given after the instruction on “conspiracy.” Allen claims this confused the jury
about the mental state required to join a conspiracy. We need not analyze whether the district
court’s instruction put the jury at risk of confusion because, as we have stated on this issue, “at
worst, any [such] error in giving the instruction was harmless.” United States v. Williams,
612 F.3d 500, 508 (6th Cir. 2010). Therefore, we find that the district court did not abuse its
discretion in giving the “deliberate ignorance” instruction after the “conspiracy” instruction.
C. Reasonableness of the Sentence
Allen argues that the sentence imposed by the trial court is procedurally and substantively
unreasonable and excessive. “[C]ourts of appeal must review all sentences—whether inside, just
outside, or significantly outside the Guidelines range—under a deferential abuse-of-discretion
standard.” Gall v. United States, 552 U.S. 38, 41 (2007).
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No. 15-5525, United States v. Allen
At sentencing, the district court found that Allen had a criminal history category of I and
an offense level of 42, which yielded a Guidelines range of 360 months to life. The district court
sentenced Allen to a prison term of 360 months.
1. Procedural Reasonableness
We “must first ensure that the district court committed no significant procedural error,
such as failing to calculate (or improperly calculating) the Guidelines range . . . .” Id. Allen
claims that her sentence is procedurally unreasonable because the district court improperly
calculated her Guidelines range in three ways.
a. U.S.S.G. § 3B1.3
United States Sentencing Guidelines (“U.S.S.G.”) § 3B1.3 prescribes a two-level increase
in the offense level “[i]f the defendant abused a position of public or private trust . . . in a manner
that significantly facilitated the commission or concealment of the offense . . . .” U.S.S.G.
§ 3B1.3. Allen argues that she was not in a position of trust because she was merely a sales
representative who had only an arms-length contractual relationship with her customers.
We disagree. Allen used the client list from her previous tax preparation business as a
recruitment tool after she transitioned to selling Benchmark annuities. Having established this
prior relationship of trust with her tax preparation clients, Allen abused that position of trust
when she involved them with Benchmark. See United States v. Sedore, 512 F.3d 819, 825 (6th
Cir. 2008) (holding that a tax preparer held a “position of trust” with his clients sufficient to
support application of the § 3B1.3 adjustment).
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No. 15-5525, United States v. Allen
b. U.S.S.G. § 2B1.1(b)(16)(B)(iii)
Under the Guidelines in effect at the time Allen was sentenced, § 2B1.1(b)(16)(B)(iii)2
prescribes a four-level increase in the offense level if the defendant “substantially endangered the
solvency or financial security of 100 or more victims . . . .”
At sentencing, the district judge justified the application of this enhancement by stating,
in part, that he had reviewed over 100 victim impact statements. Allen argues that the
enhancement is nonetheless inappropriate because the district judge’s ruling did not include a
finding of the “specific individuals who were affected.”
Reviewing this issue under the Gall standard for procedural reasonableness, we find that
it was not an abuse of discretion for the district judge to find, by a preponderance of the
evidence, that Allen substantially endangered the solvency or financial security of at least 100
victims.
c. Double counting
Allen argues that the district judge engaged in prohibited “double counting” of
adjustments and enhancements when he applied the § 3B1.3 adjustment, the
§ 2B1.1(b)(16)(B)(iii) enhancement, an enhancement for the number of victims, and an
adjustment for targeting vulnerable victims.
“[D]ouble counting occurs when ‘precisely the same aspect of the defendant’s conduct is
factored into his sentence in two separate ways.’” United States v. Volkman, 797 F.3d 377, 399
(6th Cir. 2015) (quoting United States v. Lay, 583 F.3d 436, 447 (6th Cir. 2009)) (finding no
double counting where a doctor received both a “special skill” adjustment and a “vulnerable
victims” adjustment when he unlawfully distributed controlled substances to his drug-addicted
2
In their briefs, both parties incorrectly cite the disputed Guidelines section as § 2B1.1(b)(15)(B)(iii).
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No. 15-5525, United States v. Allen
patients). Double counting occurs “where a single aspect of the defendant’s conduct both
determines his offense level and triggers an enhancement.” United States v. Eversole, 487 F.3d
1024, 1030 (6th Cir. 2007) (quotation marks and citation omitted).
“On the other hand, where separate enhancements penalize distinct aspects of the
defendant’s conduct, no double counting will be found.” Id. (quotation marks and citation
omitted). “Absent an instruction to the contrary, enhancements under Chapter Two [and]
adjustments under Chapter Three . . . are to be applied cumulatively. In some cases, such
enhancements [and] adjustments . . . may be triggered by the same conduct. For example,
shooting a police officer during the commission of a robbery may warrant an injury enhancement
under §2B3.1(b)(3) and an official victim adjustment under §3A1.2, even though the
enhancement and the adjustment both are triggered by the shooting of the officer.” U.S.S.G.
§ 1B1.1 n.4(B).
We find that there was no impermissible double counting here because each of the
adjustments and enhancements Allen received penalized distinct aspects of her conduct. Here,
no single aspect of Allen’s conduct both determines her offense level and triggers her
enhancements and adjustments. As the Guidelines example illustrates, multiple enhancements
and adjustments can permissibly be triggered by the same conduct. Such is the case here.
2. Substantive Reasonableness
“If the sentence is deemed procedurally reasonable, we must then determine if it is
substantively reasonable. The sentence may be substantively unreasonable if the district court
chooses the sentence arbitrarily, grounds the sentence on impermissible factors, or unreasonably
weighs a pertinent factor. . . . Moreover, an appellate court should not overturn a sentence just
because it might reasonably have concluded that a different sentence was appropriate.” United
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No. 15-5525, United States v. Allen
States v. Brooks, 628 F.3d 791, 796 (6th Cir. 2011) (quotation marks and internal citations
omitted).
a. Flawed Guidelines
Allen argues that her sentence was substantively unreasonable because the Sentencing
Guidelines are “deeply flawed,” and the district judge abused his discretion by “giving too much
weight to [them].” Allen’s argument alleges that the Guidelines are arbitrary and that fraud
offenses are accompanied by a “cluster” of practically-inevitable enhancements, concluding that
the resulting sentences are “inordinately harsh.”
The district judge found that the Presentence Investigation Report correctly calculated
Allen’s offense level to be 43, which yielded a Guidelines range of life. After hearing defense
counsel’s arguments regarding the flaws in the Guidelines, the district judge decided to continue
the sentencing to another day so he could consider those arguments and the government’s
response to them. At the subsequent sentencing hearing, the district judge explained at length
the consideration he had given to the parties’ arguments. As a result of his analysis of the factors
delineated in 18 U.S.C. § 3553(a), the district judge reduced Allen’s offense level from 43 to 42,
yielding a Guidelines range of 360 months to life. The district judge then imposed a sentence of
360 months. Although, as Allen points out, this is still effectively a life sentence given her age,
imposing a below guidelines sentence evidences that the sentencing judge treated the guidelines
as advisory and considered the § 3553(a) factors. The district judge’s lengthy discussion of the
§ 3553(a) factors provides further evidence of this. Under the deferential abuse of discretion
standard, we do not conclude that the district court gave undue weight to the Guidelines.
20
No. 15-5525, United States v. Allen
b. Excessiveness
Allen’s final argument is that her sentence is substantively unreasonable because it is
excessive. Allen points out that, under her current sentence, she will not likely be released until
she is in her 90s. She calls this a de facto life sentence and claims that such a sentence is
incompatible with the goal of rehabilitation.
We previously considered and rejected a similar argument because it “implie[d] that
being nearer the grave confers a license to violate the law, or at least a discount on the
consequences.” United States v. Lamb, 431 F. App’x 421, 427 (6th Cir. 2011). Here too, we
find that the district court did not abuse its discretion when it sentenced Allen.
III. CONCLUSION
For the abovementioned reasons, we AFFIRM.
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