United States v. Gormley ( 2000 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 96-4666
PURVIS H. GORMLEY,
Defendant-Appellant.
Appeal from the United States District Court
for the Western District of North Carolina, at Charlotte.
Charles H. Haden II, Chief District Judge, sitting by designation.
(CR-96-12-V)
Argued: December 3, 1999
Decided: January 7, 2000
Before WILKINSON, Chief Judge, KING, Circuit Judge,
and BUTZNER, Senior Circuit Judge.
_________________________________________________________________
Vacated and remanded by published opinion. Senior Judge Butzner
wrote the opinion, in which Chief Judge Wilkinson and Judge King
joined.
_________________________________________________________________
COUNSEL
ARGUED: George Alan DuBois, Assistant Federal Public Defender,
Raleigh, North Carolina, for Appellant. Brian Lee Whisler, Assistant
United States Attorney, OFFICE OF THE UNITED STATES
ATTORNEY, Charlotte, North Carolina, for Appellee. ON BRIEF:
William Arthur Webb, Federal Public Defender, Raleigh, North Caro-
lina, for Appellant. Mark T. Calloway, United States Attorney,
OFFICE OF THE UNITED STATES ATTORNEY, Charlotte, North
Carolina, for Appellee.
_________________________________________________________________
OPINION
BUTZNER, Senior Circuit Judge:
Purvis H. Gormley was indicted on one count of conspiracy to
defraud the United States in violation of 18 U.S.C.A. § 286 (West
Supp. 1999) and nineteen counts of filing fraudulent claims in viola-
tion of 18 U.S.C.A. § 287 (West Supp. 1999). After a jury trial,
Gormley was convicted of the conspiracy charge and 16 counts of
making fraudulent claims. On August 12, 1996, the trial court sen-
tenced Gormley to concurrent terms of 51 months imprisonment for
each count. Gormley appeals his sentence only, complaining about
enhancements the district court imposed. We affirm the enhancement
based on obstruction of justice, U.S.S.G. § 3C1.1 (1995). We reverse
the enhancement based on a special skill, U.S.S.G.§ 3B1.3.
I
In the early 1990s, Gormley owned a strip mall and convenience
store, and he operated a tax preparation business out of the store.
Gormley is not an accountant and has no special training in the area
of tax preparation. In 1993, Gormley began soliciting customers for
MDP Quick Tax (MDP), a business that filed electronic tax returns
with the Internal Revenue Service (IRS). MDP was owned by
Michael Pahutski, a tax preparer and bookkeeper.
MDP Quick Tax was in the "rapid refund" business. In order to
obtain a rapid refund, a taxpayer brought his or her tax information
to an agent of MDP. Pahutski then prepared a return based on this
information and filed the return electronically with the IRS. Through
an arrangement with a bank, the taxpayer was then issued a check in
the amount of the anticipated refund less fees charged by MDP and
the bank. In return, the taxpayer assigned to MDP the actual refund
check from the IRS. In order to establish the business, Pahutski
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obtained special authorization from the IRS to file returns electroni-
cally.
Gormley solicited customers for MDP and interviewed them to
obtain the necessary information to file a return. He then forwarded
a completed information sheet, the taxpayer's W-2 forms, and other
supporting documentation to Pahutski, who used the materials to pre-
pare the return for electronic filing. MDP paid Gormley a commission
for every client he brought in, and he was one of several people in the
community soliciting business for MDP.
An IRS investigation revealed that a number of the returns elec-
tronically filed by MDP contained claims for nonexistent or non-
qualifying dependents, falsified wage and income information, and
fraudulent tax credit claims. The effect of these false claims was to
increase the amount of the refund beyond that which the taxpayer was
actually owed. The evidence presented at trial indicated that Gormley
provided the false information used in some of the returns and con-
spired to do so with Pahutski and other agents of MDP and that they
kept the fraudulently produced portion of the refunds for themselves.
Pahutski and two other individuals who solicited business for MDP
pled guilty and testified for the government at Gormley's trial. A
number of taxpayers that Gormley had recruited for MDP also testi-
fied for the government. Gormley did not testify at trial and did not
call any witnesses on his behalf.
After the trial and before sentencing, the probation officer charged
with preparing the presentence report (PSR) interviewed Gormley. In
the PSR, the probation officer summarized a statement Gormley made
during the interview:
During the interview with the United States Probation Offi-
cer, conducted on 6/17/96, the defendant reported that he
was unaware that any of the information that he had
obtained and subsequently recorded on individual tax
returns was false. Mr. Gormley states that he would prepare
the information sheets for the taxpayers, recording the infor-
mation given to him by the individuals filing the returns. He
denies listing false dependents, claiming false child care
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exemptions, or altering filing status, on behalf of clients of
MDP Quick tax, in order to obtain higher, fraudulent tax
refunds from the IRS. Mr. Gormley further reports that the
individual taxpayers were knowledgeable of tax procedures,
and fully aware that the above-mentioned practices would
result in their receiving larger refunds. He states that he only
recorded the information provided to him, and did not ques-
tion the validity of the data that he obtained. Based on his
belief that the information being provided to him by the tax-
payers was genuine, his only role being preparation of the
tax returns, Mr. Gormley states that he did not view himself
as being culpable in criminal activities.
J.A. 294-95.
II
Gormley challenges two upward adjustments to the offense level
the trial court imposed at sentencing. He first contends that his state-
ments to the probation officer did not warrant a two-level obstruction
of justice enhancement under U.S.S.G. § 3C1.1. He also contends that
he did not possess a special skill warranting a two-level enhancement
under U.S.S.G. § 3B1.3.
Appellate courts are required to give due deference to the district
courts' application of the sentencing guidelines. 18 U.S.C.A.
§ 3742(e) (West Supp. 1999). "If the issue turns primarily on a factual
determination, an appellate court should apply the`clearly erroneous'
standard." United States v. Daughtrey, 874 F.2d 213, 217 (4th Cir.
1989) (citation omitted). "If the issue . . . turns primarily on the legal
interpretation of a guideline term, . . . the standard moves closer to
de novo review." Id.
III
The Sentencing Guidelines provide: "If the defendant willfully
obstructed or impeded, or attempted to obstruct or impede, the admin-
istration of justice during the investigation, prosecution, or sentencing
of the instant offense, increase the offense level by 2 levels." U.S.S.G.
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§ 3C1.1. The commentary to that section instructs that a "defendant's
denial of guilt (other than a denial of guilt under oath that constitutes
perjury) [or] refusal to admit guilt or provide information to a proba-
tion officer . . . is not a basis for application of this provision."
U.S.S.G. § 3C1.1 appl. note 1. The Second Circuit has stated that,
when applying the denial of guilt exception, "[t]here is no principled
basis for distinguishing between laconic noes and the same lies
expressed in full sentences." United States v. Johns, 27 F.3d 31, 35
(2nd Cir. 1994).
In this case, even evaluating the statements in the light most favor-
able to the defendant, see U.S.S.G. § 3C1.1 appl. note 1, Gormley
went beyond merely denying his guilt and implicated his taxpayer cli-
ents in the scheme to defraud the IRS. Gormley therefore cannot avail
himself of the denial of guilt exception. Cf. United States v. Surasky,
976 F.2d 242, 245 n.2 (5th Cir. 1992) (noting that, if a defendant
"were to say `John Smith did it, not me,' when in fact John Smith was
not involved, such a statement . . . would be more than a simple denial
of guilt and could be treated as obstruction of justice").
In order to apply the obstruction of justice enhancement, the dis-
trict court must find that a defendant "`consciously acted with the pur-
pose of obstructing justice.'" United States v. Romulus, 949 F.2d 713,
717 (4th Cir. 1991). Because the question of willfulness is essentially
a finding of fact, the decision of the district court is subject to "clearly
erroneous" review. Daughtrey, 874 F.2d at 217.
Gormley contends that he did not act with the intent to deceive, but
that he made his statement to the probation officer during a very emo-
tional time, in the hours after the jury returned its verdict convicting
him.
The record reflects, however, that Gormley was convicted on May
22, 1996, and he made the statement to the probation officer on June
17, 1996. His explanation is therefore unavailing. The district court
found that Gormley's false statements were an attempt to obstruct jus-
tice and stated: "I am aware of the falsity of the statements based
upon the evidence that I heard at trial . . . ." J.A. 268. Because no
other explanation is clear from the record, the conclusion of the dis-
trict court that Gormley acted willfully was not clearly erroneous.
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A false statement to a probation officer only gives rise to an
obstruction of justice enhancement if it is material. U.S.S.G. § 3C1.1
appl. note 3(h). The Sentencing Guidelines commentary explains:
"`Material' evidence, fact, statement, or information, as used in this
section, means evidence, fact, statement, or information that, if
believed, would tend to influence or affect the issue under determina-
tion." U.S.S.G. § 3C1.1 appl. note 5.
Gormley argues that his statement to the probation officer, even if
false, was not material because it had no effect on the proceedings.
The threshold for materiality, however, is "conspicuously low."
United States v. Dedeker, 961 F.2d 164, 167 (11th Cir. 1992). In
Dedeker, the court held that the failure of the defendant to disclose
a misdemeanor conviction to a probation officer constituted obstruc-
tion of justice, even though the conviction would not be used in the
calculation of the defendant's criminal history. Id. at 165-67. Because
the defendant's false statement, if believed, could have affected the
appropriate sentence within the calculated range, it tended to influ-
ence an issue under determination. Id. at 167. Gormley's statement
similarly was material because, if believed, it could have affected the
sentence ultimately imposed within the guideline range. The district
court therefore did not err in applying the obstruction of justice
enhancement to Gormley's sentence.
In upholding the enhancement of Gormley's sentence for obstruc-
tion of justice, we note a difference with the Eleventh Circuit case of
United States v. Gardiner, 955 F.2d 1492 (11th Cir. 1992). In
Gardiner, the court held that a presentence explanatory assertion of
innocence similar to the one in this case could not be material to sen-
tencing as a matter of law because, in order to believe the assertion,
one would have to disregard the jury verdict. Id. at 1499 & n.15. We
decline to place this judicial gloss on the requirements for the obstruc-
tion of justice enhancement.
IV
The Sentencing Guidelines provide: "If the defendant . . . used a
special skill in a manner that significantly facilitated the commission
or concealment of the offense, increase [the offense level] by 2
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levels." U.S.S.G § 3B1.3. The commentary to the guideline explains
that "`[s]pecial skill' refers to a skill not possessed by members of the
general public and usually requiring substantial education, training or
licensing. Examples would include pilots, lawyers, doctors, accoun-
tants, chemists, and demolition experts." U.S.S.G. § 3B1.3 appl. note
2. Because the determination of whether a defendant possessed a spe-
cial skill that facilitated the commission of the offense is ordinarily
factual, the court reviews the findings of the district court to deter-
mine if they are clearly erroneous. United States v. Hummer, 916 F.2d
186, 191 (4th Cir. 1990). But if the district court undertakes to inter-
pret the guidelines, "the standard moves closer to de novo review."
Daughtrey, 874 F.2d at 217.
In making its ruling on the special skill enhancement, the district
court stated:
[N]ot only did Mr. Gormley engage in some special skills
but he also availed himself of the services of others who
were co-conspirators to handle the actual preparation of
these returns, and the evidence is replete in that, so I do find
again as with this that there was a special skill involved.
J.A. 266. One of Gormley's coconspirators, Pahutski, was specially
authorized by the IRS to file tax returns and obtain refunds electroni-
cally. Because "role in the offense" adjustments, such as the special
skill enhancement, are based on a defendant's status, they "may not
be based on a coconspirator's actions, but must instead result from an
individualized determination of each defendant's culpability." United
States v. Moore, 29 F.3d 175, 176 (4th Cir. 1994). To the extent that
the district court relied on the special skills of Gormley's coconspira-
tors in adjusting his offense level, it committed clear error. The ques-
tion, then, is whether Gormley personally used a special skill in the
commission or concealment of the offense.
In the original presentence report, the probation officer did not pro-
pose an enhancement for a special skill. At the behest of the govern-
ment, however, the probation officer recommended the enhancement,
observing that Gormley had been in the tax preparation business for
several years and making the conclusory statement that Gormley's
"knowledge of tax matters would qualify as a`special skill' that the
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general public, by and large does not possess." J.A. 310. The district
court adopted the findings of the presentence report but made no fur-
ther statement regarding Gormley's personal possession of a special
skill.
The record reflects that Gormley did not have any formal training
in the areas of tax preparation or accounting but that he had operated
a tax preparation business as a sideline for several years. While a spe-
cial skill "usually requir[es] substantial education, training or licens-
ing," U.S.S.G. § 3B1.3 appl. note 2, "substantial training is not a
mandatory prerequisite to making a special skills adjustment."
Hummer, 916 F.2d at 191. The skill in question must at least be one
that is obtained through the substantial equivalent of such training and
must not be one that is possessed by members of the general public.
See id. (upholding application of the adjustment to "an inventor who
had obtained patents for his inventions and had`through life experi-
ence obtained the special ability to tamper with consumer prod-
ucts.'").
Gormley only had experience in tax preparation, a skill that mil-
lions of Americans exercise every year. His role in the offenses was
to gather information from clients and to fabricate dependents,
income information, filing status, and tax credit claims. These are not
skills that one normally obtains through "substantial training," nor are
they on par with the special skills possessed by"pilots, lawyers, doc-
tors, accountants, chemists, and demolition experts." U.S.S.G.
§ 3B1.3 appl. note 2.
The district court inappropriately considered the skills possessed by
Gormley's coconspirators. It also erred in its interpretation of the
guidelines by concluding that tax preparation as practiced by Gorm-
ley is a special skill. We reverse this aspect of the case. Gormley did
not possess a special skill within the meaning of U.S.S.G. § 3B1.3.
V
We vacate Gormley's sentence and remand for resentencing by
eliminating the enhancement for the use of a special skill.
VACATED AND REMANDED
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